This is the news investors have been hoping to hear.
General Motors CEO Mary Barra will announce at the automaker's investor day later this week that it plans for its electric vehicle program to be profitable in 2025. Bloomberg reports Barra will outline a specific plan on November 17 detailing how the carmaker will cover investments for battery plants and production and covering margins for the Ultium battery program.
Equally important, company executives will present a plan detailing GM's plan to sell more EVs without losing money. So far this year, GM has sold roughly 44,000 EVs at a loss. GM is battling rivals like Tesla and Ford to become America's largest EV builder. A few upcoming examples include the Chevrolet Blazer EV and Equinox EV, two affordable crossovers aimed squarely at the mass market. The Silverado EV will initially carry a high price tag though that's expected to drop after the initial launch.
It's taken several years for GM to reach the point where it can mass produce EVs with a state-of-the-art battery pack. By 2035, the company hopes to phase out combustion-engined vehicles, though that could change based on many factors beyond GM's control.
Last year, GM said it intends to double revenue to around $280 billion by 2030, and EVs will play a significant role in that. But GM has to build EV market share first. Another vital revenue source will be software technology and Cruise, the company's self-driving division which continues to lose money.
What will be interesting to see is whether or not this year's investor day will have any impact on GM stock. That didn't happen last year.
While it's possible these upcoming EVs will begin generating a profit in just three years, one is certain; pure battery electrics will still have lower profit margins compared to combustion-engined vehicles. This will likely remain the case for several years. Currently, GM's existing lineup continues to fund EV development and the Cruise unit. Ironically, the bulk of those profits is from gas-hungry trucks and SUVs.
Aside from Barra, other top GM executives expected to speak this week include President Mark Reuss, CFO Paul Jacobson, product development chief Doug Parks, and Travis Katz, leader of BrightDrop, GM's electric delivery van division. Above all, investors want to know whether GM can achieve EV production volume at Tesla's level. We should have a more precise answer soon.