General Motors Co GM 3.28%
has set a 2035 target date for the phasing out of petrol and diesel-powered vehicles from its showrooms worldwide, among the first major carmakers to set a timeline on the transition to a fully electric range.
GM’s goal, announced Thursday by CEO Mary Barra in a social media report, would be a striking transition from its current business model. Vehicles that run on fossil fuels and emit pollution account for about 98% of GM’s sales and all of its profits. The large pickups and sport utility vehicles that are the company’s largest money maker also count among the vehicles that consume the least fuel.
The country’s largest carmaker by sales mentions the date 2035 to eliminate all exhaust pollution. Yet many governments around the world, from California to Japan and the United Kingdom, have undertaken to ban cars from gas and diesel.
GM had earlier said it expected its own portfolio and the broader car market to eventually become fully electric, but company executives did not discuss a time frame.
The automaker employs one of the largest automotive industry in the automotive industry. In November, he said he would increase his investment in plug-in vehicles as well as driverless car technology by one-third of previous plans to $ 27 billion by the middle of the decade. The company said it represented more than half of its planned capital expenditure during that time.
GM also said Thursday that it intends to be carbon neutral by 2040, which means it will eliminate carbon emissions from all of its operations, as well as the vehicles it manufactures and sells. About three-quarters of GM’s carbon production comes from the emissions of cars and trucks that put it on the road.
GM shares rose sharply after the announcement and rose 4% on Thursday.
Decades of new electric vehicle models are expected to arrive at dealers within the next few years. We followed eight Wall Street Journal reporters in four countries to see if they and the world were ready to make the switch. (Originally published on January 29, 2020)
The company’s plan to be fully electric by 2035 will indicate a significant acceleration in the use of electric vehicles than most forecasters in the industry expect.
Research firm LMC Automotive predicts that by 2032, electric vehicles will account for only 20% of global sales. RBC Capital expects the penetration of electric vehicles to be 43% against GM’s 2035 target.
Last year, about 2.2 million fully electric vehicles were sold worldwide, which according to research firm EV Volumes accounts for only about 3% of total sales. Analysts point to several barriers to broader adoption, including the need for more charging stations and other infrastructure. There are also questions about whether raw materials are needed to produce batteries, such as cobalt and lithium, should the use of electric vehicles begin.
Today, the higher cost of plug-in cars compared to gas or diesel vehicles is a deterrent for many buyers. GM expects the gap to widen by the middle of the decade due to advances in battery technology. It invests in a $ 2.3 billion battery factory in Ohio in a joint venture with South Korean LG Chem.
Due to the high battery costs, GM and other automakers have focused their earlier efforts on luxury or sporty electric cars and trucks with higher price points to maintain profit margins. GM’s first vehicle to use its new battery technology, the GMC Hummer pickup, for example, will go on sale for about $ 113,000 when it hits theaters later this year.
“We believe that with our scope and reach, we can encourage others to follow suit and make a significant impact on our industry and on the economy,” she said. Barra said in a post on LinkedIn.
Dane Parker, GM’s head of sustainability, said on Thursday that GM’s goal of becoming electric within 15 years depends in part on incentives by the government and other support to encourage consumers in the direction of plug-in cars.
Incentives “really help with consumer acceptance and overcoming some of the initial barriers that consumers may have with the initial cost, as well as things like loading infrastructure,” Parker said.
Write to Mike Colias by [email protected]
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