Electric vehicles and e-mobility are the new (re)start for all the automakers, and whoever goes the extra mile will secure a better future and results. General Motors (NYSE: GM), the automaker with experience of over 100 years, is no different. The company decided to increase the investments in the electric and autonomous segment, so the new plan is to spend $35 billion until 2025. This change goes hand-by-hand with the announcement that GM will extend a $5 billion credit line to purchase hundreds of autonomous and battery-powered shuttles through its subsidiary Cruise. The new figures are a significant increase to both the initial plan (70% increase) and the revised plan announced last November (30% increase). Having in mind that the EV and autonomous segment is just 2% of the new car market, this amount seems even bigger! And that is how you hit a pedal to the metal.
How does the market feel about EVs?
It looks the whole market has a similar trend when it comes to investments in EVs. The world’s second-largest automaker Volkswagen (OTC: VWAGY) announced an even higher capital expenditures plan. In the next five years, the German automaker plans to spend $86 billion on electric vehicles. Ford (NYSE: F) wants to electrify 40% of its vehicle offer, and the company is ready to spend $30 billion by 2030. So, GM has some serious competition if it wants to position itself as the largest EV manufacturer in North America.
Tesla as the EV market leader
With aggressive plans like these, the traditional automakers are seriously trying to overtake Tesla’s (NASDAQ: TSLA) leading position in the EV market. Tesla used the advantage of the first-mover to transform the EV market, in the similar way that Netflix (NASDAQ: NFLX) and Amazon (NASDAQ: AMZN) changed the entertainment and retail world, respectively. However, the amount of investments that the legacy automakers are pouring into the EV field is giving the consumers more and more options, straightened with their experience in the automotive industry. Tesla will have to fight with all of that.
Outlook
GM’s first milestone is 2025, when it plans to launch 30 new electric models. Out of those 30, 20 models will be available in North America, throughout all GM brands like Cadillac, Buick, GMC, and Chevrolet, covering all price ranges. This will be a big change from GM today’s offer in the US which offers only the Chevy Bolt and the Chevy Bolt EUV. Hummer EV models are the first to come later this year, and Cadillac models Lyriq and Celestiq will follow. Of course, the pick-up truck segment will not be left out, Chevy Silverado will get an electric version. In addition, the company plans to build two new factories in the US to produce batteries, in addition to the factories in Tennessee and Ohio, that are already under construction. If all that gets through, maybe GM has the potential to become the largest EV manufacturer in North America. We hope that the current semiconductor shortage will not severely alter the company’s plans.
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