General Motors Targets Tesla With Ambitious EV Plans

General Motors outlined an aggressive growth plan at its investor day on Wednesday. The automaker is targeting a doubling of its revenue to $280 billion by 2030 while bolstering margins at the same time. GM’s five-year sales average has been $140 billion.

GM CFO Paul Jacobson explained to CNBC that the opportunity for the company involves connected vehicles. This is where the automaker can look to software to diversify its revenue stream in addition to selling vehicles. Jacobson described a $20 billion-25 billion market opportunity in software alone, coupled with its autonomous or driver assistance system and electric vehicles (EVs).

GM is targeting margins in the 12-14% range in the same period driven by the scaling of EVs coupled with falling battery prices. The automaker is also looking to its software business for higher margins in addition to expanding into new segments.

EVs are a major part of GM’s growth plan. The company expects revenue from this division to increase from $10 billion in 2023 to $90 billion each year by the end of the decade. GM says it has “several compelling EVs in high volume segments” in the works. In fact, the traditional automaker says that it will be transitioning to a portfolio mix that is dominated by EV products.

Investors Skeptical

GM’s stock did not rally on the company’s ambitious outlook, and it could be because investors are not convinced that GM can pull it off. The forecast is dependent on markets such as autonomous driving continuing to gain traction so that GM can reach its revenue goals by the end of the decade.

Jacobson maintained that GM is going forward with a “startup mentality” and is confident that customers will dole out $135 per month on software subscriptions. GM is also betting that autonomous driving will catch on sooner than later.

General Motors suspended its dividend during the coronavirus year. Now GM is prioritizing directing its capital expenditures toward its growth initiatives.

Targeting Tesla

With its EV push, GM will be going toe-to-toe with industry leader Tesla. GM will have its work cut out for it, as Tesla has a grip on this industry, with 63% market share in the U.S. EV market.

Tesla $TSLA currently holds a 63% market share of the EV market in the US – CNBC

— Stock Market News (@StockMKTNewz) October 6, 2021

Tesla holds its shareholder meeting later this week.