General Motors expects its EV lineup to generate more than $50 billion in annual revenue by 2025. This target includes building more than one million EVs annually at five North American assembly plants. As part of the prophecy, GM expects EVs to achieve low to mid-single-digit profit margins. These figures include emission credits and software revenue but do not include federal incentives or tax credits.
“We actually estimate that this tax credit will be $3,500 to $5,500 per vehicle originating from GM through 2025,” GM CFO Paul Jacobson said at GM Investor Day last week. “Together, these credits can add another 5 to 7 points of margin to EV, which puts us in a position where the tax credit accelerates what we are already going to do and get our vehicles to ICE-like margins by 2025.”
The 1 million EV volume will account for about half of GM’s current North American vehicle production. In 2021 the company sold 2.1 million cars and trucks. Only 33,000 EVs for sale, including the Chevy Bolt and Bolt EUV. This means GM hopes to increase EV sales by more than 30 times volume by 2021.
“We believe the EV market will be even bigger by 2025 than the 17 percent industry share that many third-party forecasters predict,” Jacobson told reporters. “And we will do it with great design, quality, performance and more price points than anyone else can offer.”
GM also expects US battery cell capacity to reach 160 gigawatt-hours in the same timeframe. Meanwhile, the cost of its battery cells will drop from about $87 per kilowatt-hour in 2025 to less than $70 per kWh by the end of the decade, according to Jacobson.
With those profits, the company estimates that its total revenue will increase 12 percent annually until 2025. That revenue growth will come not only from EVs but also from software, BrightDrop’s electric delivery van unit, and Cruise, the self-driving vehicle company from which GM is majority owner. In addition, the company has entered into a joint partnership with Honda to manufacture low-cost electric vehicles.
