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How GM predicts annual growth and higher margins

General Motors Co. provided a detailed roadmap on how the company plans to double its annual revenue and increase margins by 12-14% by 2030, following the transformation of GM into a growth company driven by electric vehicles, connected services and new businesses.

“GM has already changed the world and we are doing it again,” said GM President and CEO Marie barra. “We have several long-term growth drivers and I have never been so confident or excited about the opportunities ahead. “

GM concluded the first of two days of investor meetings by sharing its growth plans. Executives – many of whom have recently joined GM from other companies – explained how GM’s compelling hardware and software platforms will combine to create growth, increase margins, add customers and diversify revenues.

“GM is opening a history of secular growth that is changing the trajectory of our business,” said Paul Jacobson, Executive Vice President and Chief Financial Officer. “Simply put, we are at an inflection point where we expect to double our revenue by 2030 while increasing our margins. We will achieve this by expanding our core business of designing, building and selling world-class ICE, electric and autonomous vehicles, developing software and services with high margins, and entering and marketing new businesses. “

According to Jacobson, GM’s financial goals include:

  • Increase revenue growth with improved diversification: GM described its path to doubling annual revenues from a five-year average of about 140 billion dollars by the end of the decade, with software and new business growth at nearly 50% CAGR through 2030 and strong growth in the company’s core automotive business.
  • Margin expansion: GM believes its transformation can generate margins of 12-14% by the end of the decade, with core automotive business margins increasing as electric vehicles evolve, battery costs decline and the The company is developing higher margin software and new business platforms.
  • Convincing platforms: GM expects revenue from electric vehicles to rise by about 10 billion dollars in around 2023 $ 90 billion every year by 2030 as the company launches several compelling EVs in high-volume segments. GM envisions a path where connected vehicles and other new companies drive more than 80 billion dollars additional new incomes, with most of the growth accelerating in the second half of the decade as they evolve.
  • Marketing of Cruise: With Cruise, GM occupies a leading position in the autonomous services market with the potential to provide $ 50 billion in revenue each year by the end of the decade.
  • Internally financed capital expenditure: GM’s annual capital spending, including investments in Ultium joint ventures, is expected to $ 9 billion To 10 billion dollars range in the medium term as the company moves to a predominantly VE product portfolio. Due to GM’s strong earnings and growing margins, the company expects to fund these investments entirely through internally generated funds.
  • Strong cash conversion: GM expects to achieve an 80 to 90 percent cash conversion rate in the second half of the decade.
  • Solid balance sheet: GM’s strong balance sheet will allow the company to continue to invest in our growth priorities while maintaining an investment grade rating, which is important for long-term growth.

Exploit the opportunities of electric vehicles, software services and new businesses

During the first day of presentations and investor discussions, GM executives described how the company’s Ultium and Ultifi platforms underpin the company’s growth strategy.

There are many opportunities:

  • GM projects annual software and service revenue opportunities in the $ 20 billion to $ 25 billion, against 30 million connected vehicles expected by the end of the decade. OnStar is already the industry’s leading connectivity platform with more than 16 million connected vehicles on the road today, with software and services generating a $ 2 billion in annual turnover. Part of the growth in GM’s software and services comes from OnStar Insurance, which is expected to provide a potential revenue opportunity of more than $ 6 billion annually by the end of the decade.
  • Cruise CEO Dan Ammann provided investors with details of Cruise’s marketing and rapid scale-up efforts as it prepares to launch the Cruise Origin AV.
  • BrightDrop, a new GM company that is building a connected and electrified ecosystem of delivery products and services for commercial customers, expects to deliver $ 5 billion in turnover by the middle of the decade and potentially 10 billion dollars by the end of the decade when it is expected to approach 20% margins. BrightDrop’s EV600 full-size electric van, Ultium-powered, is launching now and BrightDrop will add a second specially designed product – the smaller EV410 – in 2023.
  • GM has a portfolio of 20 new start-ups – several already launched, others about to launch – helping to provide a constant pipeline of innovation and potential new revenue streams. Executives presented a snapshot of a brand new software startup in development, internally called Future Roads, which uses data analytics to create insights into safer roads and communities.

During today’s presentations, GM also announced that it is increasing its investment in charging infrastructure to nearly three-quarters of a billion dollars by 2025, covering all areas of charging, including home, workplace and public charging across the United States and Canada. This investment will significantly increase access to reliable public charging with the superior customer experience of Ultium Charge 360.

Tomorrow, investors will participate in demonstrations and in-depth discussions of the vehicles and technologies that are driving GM’s growth plan. In-vehicle experiences will include the GMC HUMMER EV Superc Truck, GM Defense Infantry Squad Vehicle and the Super Cruise Advanced Driver Assistance System. Tech experts will also discuss Ultra Cruise, GM’s first advanced hands-free driver assistance technology announced earlier today, as well as GM’s HYDROTEC fuel cell technology, software and projects. e-commerce enabled by GM’s Ultifi platform and more.

General Motors is a global company focused on promoting a fully electric future that is inclusive and accessible to all. At the heart of this strategy is the Ultium battery platform, which will power everything from consumer vehicles to high performance vehicles. General Motors, its subsidiaries and joint ventures sell vehicles under the Chevrolet, Buick, GMC, Cadillac, Baojun and Wuling brands.

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