They go beyond building cars.
There's so much more happening at General Motors these days than new electric vehicles like the GMC Hummer EV truck and just-revealed SUV. With plans to go completely battery-electric by 2035 now firmly in place, America's largest automaker is also keenly aware it needs to keep adapting to new business realities. Basically, building cars will no longer be enough as automakers' century-old business model is rapidly changing. New sources of revenue are required. These won't come from building new parts or creating performance brands, but rather through innovation and out-of-the-box thinking.
GM CEO Mary Barra, who's led the company since 2014, understands this fully. Reuters spoke to the carmaker's executive chief engineer for autonomous vehicles and new technology, Pam Fletcher, who gave some examples of the incubating ventures underway.
These include things like commercial delivery services and car insurance. Fletcher admitted there are "just under 20" ventures her team is developing. The ultimate goal is to become more diversified with mobility services with revenue coming in monthly or quarterly from software and services. Like Tesla, GM wants to keep selling upgrades to customers long after the vehicle itself was sold.
One of the first so-called "graduates" of Fletcher's incubator is BrightDrop, a unit that will offer electric vans and other hardware to commercial delivery firms like FedEx. It'll also provide fleet management and predictive analytics services. BrightDrop began as an idea only two years ago to combine an EV van with data-driven delivery services. Instead of an auto industry veteran, GM recruited an experienced tech entrepreneur to be BrightDrop's CEO. Barra and Fletcher want BrightDrop and other future ventures to operate independently of GM's main leadership.
Barra is also expanding OnStar into a larger platform to sell insurance and other services that can be done via online. GM dealers could one day sell customers insurance for their new vehicles and buying an OnStar membership will get them a discount.
Tesla is perhaps the definitive example right now on how to establish a steady revenue stream with virtual products, but rivals like GM are learning fast. Hiring from the tech world can bring in new levels of creativity traditional GM management could never think of. But what experienced management can do is recognize a good business opportunity and fund it appropriately. Doing so now will pay out big time in the long-term.