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GM Set Target Of A 200% Revenue Growth By 2030, Consequently Surpassing Tesla

GM Set Target Of A 200% Revenue Growth By 2030, Consequently Surpassing Tesla
The top American automaker General Motors Co has set a target of doubling its revenue by 2030, company’s Chief Executive Mary Barra told investors on Wednesday, by increasing its profits from combustion vehicles while also introducing new electric vehicles and digitally powered services to catch up with Tesla Inc.
GM will be the market leader in electric vehicle sales in the United States if it succeeds to meet its target as it will take its annual revenue to around $280 billion by 2030. Pre-tax profit margin of between 12 and 14 per cent is expected to be achieved by the company, said GM's Chief Financial Officer, Paul Jacobson, which would be much higher than the current levels of the metric. That would mean the company making a pre-tax profit of up to $39 billion annually.
While returning money to shareholders, investment of $9 billion to $10 billion in annual capital expenditures for electric vehicles and other initiatives can be managed by GM, according to Jacobson.
"This won't all happen at once," Jacobson said.
Even while the annual revenues from the sale of electric vehicles is expected by the company to rise to $90 billion by 2030, compared to $10 billion as projected for 202, the company also expected growing sales for its combustion engine-powered vehicle, according to Jacobson. He was peaking to investors after the markets closed. $80 billion is planned to be invested by the company in new businesses such as the Cruise autonomous vehicle ride service by 2030.
Barra has been trying to convince and reassure investors about the possibility of GM being able to outperform Tesla in terms of technology development and profitability in the face of the global auto industry going through the most profound technological revolution since the mass production of Ford Model T. At the automaker's Technical Center in Warren, Michigan, a two-day series of investor presentations was launched Barra and other GM executives.
Referring to digital platform companies of Silicon Valley such as Apple Inc, which have much larger market value than GM and other incumbent automakers, the executives said that GM can transition "from automaker to platform innovator".
After taking office in 2014 for the top job at GM, she had almost doubled the stock price of the company at one point in time from the price of the stocks at the time of the initial public offering of the company of just $33 in 2010. At the time of closing of markets on Wednesday, the company’s stocks were trading at $53.93.
Despite this, the total market valuation of the company at about $78 billion is still well behind that of Tesla’s of $773 billion. That is reflective of the skepticism of investors about the possibility of GM to compete with the battery and software prowess of Tesla.
A strategy for a phased transition of the company to make electric cars only by 2035 was outlined by Barra and General Motors President Mark Reuss. They said that the process of electrification of its fleet of vehicles is to get accelerated after 2030 when the company aims to make its plants in China and North America to be "capable of EV production."

Christopher J. Mitchell

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