General Motors Co. GM 3.15%
has set a target date for 2035 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 line.
GM’s goal, disclosed Thursday in a social media post by CEO Mary Barra, would mark an astonishing transition from its current business model. Vehicles that run on fossil fuels and emit pollution account for approximately 98% of GM’s current sales and all of its profits. The large vans and sports vehicles that are the company’s largest money makers are also among the least fuel-efficient vehicles.
The country’s largest carmaker for sales called the date 2035 to remove all contamination from outlet pipes as aspiration. However, many governments around the world, from California to Japan and the United Kingdom, have pledged to ban gasoline and diesel cars by then.
GM had previously said it expects its own portfolio and broader car market to become fully electric, but the company’s executives had not discussed it for a period of time.
The automaker makes one of the biggest bets in the automotive industry on electric vehicles. In November, it said it would raise its investment in plug-in vehicles and driverless vehicle technology by a third of previous plans, to $ 27 billion by the middle of the decade. The company has said it accounts for more than half of its planned capital investments during this time.
GM also said Thursday that it wants to be carbon neutral by 2040, which would mean eliminating carbon emissions from all its operations, as well as from the vehicles it manufactures and sells. About three-quarters of GM’s carbon production comes from emissions from cars and trucks it puts on the road.
GM shares rose sharply after its statement, rising about 4% on Thursday in trading.
Dozens of new electric vehicle models are expected to hit dealerships in the coming years. We followed eight Wall Street Journal journalists to 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 arrive fully electric in 2035 will mark a considerable 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 GM’s 2035 target.
Last year, about 2.2 million all-electric vehicles were sold worldwide, accounting for only 3% of global sales, according to research firm EV Volumes. Analysts point to several obstacles to adopting wider adoption, including the need for more charging stations and other infrastructure. There are also questions about whether there will be a reduction in the supply of raw materials needed to produce batteries, such as cobalt and lithium, should the adoption of electric vehicles take off.
Today, the higher cost of plug-in cars relative to gasoline or diesel vehicles is a deterrent for many buyers. GM expects this gap to close in the middle of the decade due to advances in battery technology. It is investing in a $ 2.3 billion battery factory in Ohio in a joint venture with South Korean LG Chem.
Due to high battery costs, GM and other automakers have focused their first efforts on luxury electric or sports cars and trucks with higher prices to preserve profit margins. For example, GM’s first vehicle to use its new battery technology, the GMC Hummer pickup truck, will go on sale for about $ 113,000 when it hits showrooms later this year.
“We believe that with our scale and reach we can encourage others to follow suit and have a significant impact on our industry and the economy,” Ms Barra said in a post on LinkedIn.
On Thursday, GM’s head of sustainability, Dane Parker, said GM’s goal of being fully electric within 15 years depends in part on government incentives and other support to push consumers towards plug-in cars.
The incentives “really help in accepting and overcoming some of the initial hurdles that consumers might have with the first cost, as well as things like charging infrastructure,” Parker said.
Write to Mike Colias to [email protected]
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