General Motors says its growing line-up of North American-built electric vehicles will be “solidly profitable” in 2025, by which point it will be building over one million EVs there annually.
That accounts for half of GM’s projected EV production volumes globally in 2025.
The company announced at its Investor Day that it projects low- to mid-single-digit EBIT-adjusted (earnings before interest and tax) margins on its EV portfolio in 2025, before taking into account any clean energy tax credits.
Revenue from EVs in 2025 is expected to be more than US$50 billion (A$75.1bn) by that year, and it expects total company revenue to grow at a 12 per cent compound annual rate through 2025 and reach US$225 billion (A$338bn).
Increased EV volumes and software revenue are expected to drive this growth, while GM also expects to find savings of US$2000 per vehicle by giving buyers the option to order online.
GM’s 2025 EV production goals for North America represent a significant jump, as the company expects to build 400,000 EVs on the continent from 2022 through the first half of 2024.
It’ll build this fleet of EVs in five assembly plants across the US, Canada and Mexico, and sell them across its Buick, Cadillac, Chevrolet and GMC brands plus the nascent BrightDrop delivery vehicle and technology division.
BrightDrop alone is on track to reach US$1 billion (A$1.5bn) in revenue in 2023. Its first vehicle, the Zevo 600 delivery van, will start rolling out of GM’s CAMI plant in Ontario next year, with projected volumes of 50,000 units annually by 2025.
In addition to its EV factories, GM’s battery cell joint venture Ultium Cells will be operating three plants in the US by the end of 2024 with a fourth plant planned.
The company says it has secured binding commitments for all the battery raw material it needs to reach its 2025 production goal, and will produce more than 1.2 million cells per day by mid-decade.
It’ll source raw materials from a variety of suppliers, including nickel and cobalt from Queensland Pacific Metals.
Overall, it aims to have a capacity of 160 gigawatt hours per year in North America and drive cell costs down to US$87 (A$130) per kilowatt hour by 2025.
It anticipates a 40 per cent reduction in cell costs for its Ultium batteries compared to those in the Chevrolet Bolt’s batteries.
“GM’s ability to grow EV sales is the payoff for many years of investment in R&D, design, engineering, manufacturing, our supply chain and a new EV customer experience that is designed to be the best in the industry,” said GM CEO Mary Barra.
“Our multi-brand, multi-segment, multi price point EV strategy gives us incredible leverage to grow revenue and market share, and we believe our Ultium Platform and vertical integration will allow us to continuously improve battery performance and costs.”
EVs are expected to approach 20 per cent of US industry sales in 2025, and GM says it will have multiple entries across a range of segments that represent around 70 per cent of EV industry volume.
By 2025, GM says 70 per cent of its team will be working on software and EVs, up from nearly 60 per cent at present.
Its range of combustion-powered, full-sized pickup trucks and SUVs continue to be profit drivers for the company, helping to fund the extensive investment into electric vehicles.
GM has already said it expects its EV lineup to outsell Tesla’s in the US by 2025. The company’s investor presentation included a couple of mentions of Tesla, including that more than 11,000 Teslas had been serviced at GM service centres since 2021.
It has already revealed the Chevrolet Silverado EV and GMC Sierra EV pickup trucks, low-volume Cadillac Celestiq flagship fastback, and Chevrolet Equinox EV and Blazer EV crossovers, while deliveries recently commenced for the Cadillac Lyriq crossover.
The Buick Electra E5 has also been leaked in China ahead of its launch.
All of these models bar the Bolts ride on GM’s new Ultium underpinnings, which will also be used by Honda for its upcoming Prologue and Acura ZDX crossovers.