Car companies around the world are transitioning to the electric vehicle (EV) world faster than expected. As it turned out, one major American car company is planning to completely give up on regular gas vehicles in favor of just selling EV’s. General Motors (NYSE: GM) said on Thursday that it has a goal to become completely carbon neutral, as well as eventually transition completely into only selling electric vehicles by 2035.
General Motors has been planning to go in this direction for quite some time now. The 112-year old company had even switched up its old corporate logo back in January to a newer, sleeker design in order to appeal to a more futuristic, EV-friendly consumer. At the same time, General Motors has also announced a partnership with Microsoft (NASDAQ: MSFT) in order to develop self-driving cars as well.
As for the company’s short-term plans, General Motors is rolling out its new Hummer EV sometime in 2022, which is already looking to be a major competitor to Tesla’s (NASDAQ: TSLA) own Cybertruck.
“They really help with consumer acceptance and overcoming some of the initial hurdles consumers might have with first cost, as well as things like charging infrastructure,” said GM’s chief of sustainability, Dane Parker, in an official statement. At the same time, however, GM’s management team added that much of this plan would depend on how supportive governments worldwide would be towards EVs, alongside potential tax credits to consumers.
It’s definitely a big, as well as an ambitious, change for the company since gas-powered car sales still account for around 98% of GM’s total revenue at the moment. At the same time, GM’s best selling lineups are its pickup trucks, which are some of the least fuel-efficient vehicles out there on the market. Despite what seems like a risky move at the moment, most other carmakers are embracing EV’s at a rapid rate thanks to Tesla’s success. However, few have bet so much of their business on making this kind of transition as GM has.
Shares of GM were up around 3.5% on Thursday in response to the news. Looking over the past 12 months, General Motors has shot up by around 50% in comparison to January 2019. The vast majority of Wall Street analysts are highly optimistic about General Motors’ chances in the future, especially in comparison to most other carmakers out there on the market. Around 16 analysts have a “buy” rating on GM, while only two have a neutral “hold.” In contrast, there’s not a single major analyst out there that has a bearish take on GM right now.
General Motors Company Profile
General Motors Co. emerged from the bankruptcy of General Motors Corp. (old GM) in July 2009. GM has seven brands and operates under four segments: GM North America, GM International, Cruise, and GM Financial. The United States now has four brands instead of eight under old GM. The company remains the market leader in the U.S. with 17% share in 2019. GM Financial became the company’s captive finance arm in October 2010 via the purchase of AmeriCredit. – Warrior Trading News