General Motors Co. GM 3.15%
has set a target date for 2035 for the phasing out of petrol and diesel vehicles from its global showrooms, among the first carmakers to set a timeline for switching to a fully electric line.
GM’s goal, revealed in a post on social media on Thursday by CEO Mary Barra, would mark a striking transition from its current business model. Vehicles that use fossil fuels and emit pollution account for about 98% of GM’s sales today and all of its profits. Large trucks and sport utility vehicles that are the company’s biggest factors are also among its least fuel-efficient vehicles.
The country’s largest carmaker by sales called the date 2035 to eliminate all pollution from the exhaust pipe as a suction. Even so, many governments around the world, from California to Japan and the United Kingdom, have pledged to ban motor and diesel cars until then.
GM has previously said it expects its own portfolio and wider car market to eventually become fully electric, but the company’s executives have not discussed the timeline.
The carmaker makes one of the biggest bets in the car industry on electric vehicles. In November, it said it would raise its investment in plug-in vehicles as well as driverless technology with a third of previous plans to $ 27 billion by the middle of the decade. This represents more than half of the planned capital expenditures during this time, the company said.
GM also said on Thursday that it aims to be carbon neutral by 2040, which would mean eliminating carbon emissions from all its operations, as well as from the vehicles it produces and sells. About three-quarters of GM’s carbon production comes from emissions from cars and trucks it puts on the road.
GM’s shares rose sharply following its statement, up about 4% at trading on Thursday.
Dozens of new electric vehicle models are expected to reach representatives in the next few years. I watched eight Wall Street Journal reporters in four countries to see if they and the world were ready to make the change. (Originally published on January 29, 2020)
The company’s plan to become fully electric by 2035 would mark a significant acceleration in the adoption of electric vehicles beyond what most industry forecasters expect.
Research firm LMC Automotive predicts that electric vehicles will account for only 20% of global sales by 2032. RBC Capital expects electric vehicle penetration to be 43% by the 2035 GM target.
Last year, about 2.2 million all-electric vehicles were sold globally, accounting for only about 3 percent of total sales, according to research firm EV Volumes. Analysts point to several obstacles to wider adoption, including the need for more charging stations and other infrastructure. There are also questions as to whether there will be a drop in the supply of raw materials needed to produce batteries, such as cobalt and lithium, if the adoption of electric vehicles takes off.
Today, the higher cost of plug-in cars compared to gasoline or diesel vehicles is a discouraging factor for many buyers. GM expects this gap to close in the middle of the decade due to advances in battery technology. Invest in $ 2.3 billion battery factory in Ohio in partnership with LG Chem of South Korea.
Due to high battery costs, GM and other automakers have focused their early efforts on higher-priced luxury or sports electric cars and trucks to maintain profit margins. For example, the first GM vehicle to use its new battery technology, the GMC Hummer pickup, will go on sale for about $ 113,000 when it hits showrooms later this year.
“We believe that by our size and scope we can encourage others to follow suit and have a significant impact on our industry and the economy,” Ms. Barra said in a LinkedIn post.
On Thursday, GM’s head of sustainability, Dane Parker, said GM’s goal of going fully electric within 15 years is based in part on government incentives and other forms of support to push consumers to plug-in cars.
The incentives “really help to accept consumers and overcome some of the initial barriers that consumers may face at first cost, as well as things like charging infrastructure,” Mr Parker said.
Write to Mike Colias at [email protected]
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