General Motors Co. last week told investors its North American portfolio of electric vehicles will be “solidly profitable in 2025” as the automaker scales EV capacity in the region to more than 1 million units annually by 2025.
"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," said GM Chair and 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."
Ultium is an electric vehicle platform built on a flexible battery architecture that will be the basis for the production of EVs across the automaker’s product line.
In the next three years, GM expects EV adoption to approach 20 percent of U.S. industry sales in 2025.
To leverage this market, GM will have multiple entries in pickup, SUV and luxury segments that represent about 70 percent of EV industry volume, including the Chevrolet Silverado EV, Blazer EV and Equinox EV, the Cadillac LYRIQ and the GMC Sierra EV. The automaker plans to have five of its 15 North American assembly plants building EVs.
BrightDrop — GM's tech startup creating EVs, eCarts and software — is on track to reach $1 billion in revenue in 2023, as the CAMI plant in Ontario launches full production of the BrightDrop Zevo 600 delivery van next year, and scaling to a projected 50,000 units annually by 2025
Additionally, GM's battery cell joint venture Ultium Cells will be operating plants in Ohio, Tennessee and Michigan by the end of 2024, with a fourth U.S. cell plant in the works.
Having learned its lesson regarding supply chain disruption, the company has secured binding commitments for all the battery raw materials it needs to deliver on its 2025 capacity target and continues to source its needs beyond 2025 with strategic supply agreements and direct investments in natural resource recovery, processing and recycling.
"We've built the foundation to rapidly scale our EV portfolio, make it profitable and maintain strong margins during a period of high investment," said Paul Jacobson, GM executive vice-president and chief financial officer. "Our Ultium Platform and battery technology will only get better and less expensive over time, and we have enterprise-wide momentum in EVs, Cruise, software-defined vehicles and new businesses like BrightDrop that will help us achieve our revenue and margin targets by the end of the decade."
GM's 2023-2025 key performance indicators:
Total company revenue is expected to grow at a 12 percent compound annual rate through 2025, reaching more than $225 billion as EV volumes and software revenue grow. Revenue from EVs is expected to be more than $50 billion in 2025.
GM expects to build 400,000 EVs in North America from 2022 through the first half of 2024 and grow capacity to 1 million units annually in North America in 2025.
North American battery cell capacity is forecast to surpass 160 GWh and 1.2 million cells per day by mid-decade.
The company aims to reduce cell costs for the next generation of its Ultium batteries to under $70/kWh by mid- to late-decade
Total capital spending is expected to be $11-13 billion per year through 2025, funded by ongoing healthy cash flows.
GM expects to maintain its historical EBIT-adjusted margins of 8-10 percent in North America through this growth investment period, however it forecasts earn single-digit EBIT-adjusted margins on its EV portfolio in 2025, before adding the impact of clean energy tax credits.