General Motors expects electric vehicles made in North America to turn a profit by 2025. General Motors itself will increase battery capacity and assembly plants with a target of building more than 1 million electric cars per year.
GM CEO Mary Barra said her company’s electric cars would be more attractive than competitors. Those gains include revenue from car sales, benefits from emission tax credits, and revenue from sales of software and spare parts.
According to Mary Barra last Thursday, GM will be marketing an electric low SUV costing around $30,000, a luxury SUV, a pick-up truck and an electric Hummer SUV over the next two years. The Detroit-based automaker will sell electric passenger cars by 2035.
The GM boss did promise to sell more electric cars in the US than Tesla by the middle of the decade.
“Our commitment is to lead the industry,” GM Chief Financial Officer Paul Jacobson told reporters last Thursday, quoting the Associated Press on the Autoblog page today, Friday, November 18, 2022.
The profit prediction for GM’s electric car business is different from the previously announced target. GM has said that profits will emerge from the start of marketing GM’s new generation of electric cars. However, that prediction does not take into account the capital costs of switching to the new technology.
Jacobson says it will take time for individual electric cars to deliver single-digit profit margins by 2025. EV profit margins will be even higher once the clean energy tax credit from the Federal Inflation Reduction Act is implemented in the US.
In a different context, the same prediction was made by Volvo CEO Jim Rowan who said the price of electric vehicles would be the same as those of vehicles with internal combustion engines by 2025.
