General Motors expects its EV lineup to generate more than $50 billion in annual revenue by 2025. This target includes manufacturing more than one million EVs annually across five North American assembly plants. As part of that forecast, GM expects EVs to reach low- to mid-single-digit profit margins. These numbers include emissions credits and revenue from software but do not include federal incentives or tax credits.
"We actually estimate that these tax credits are going to be worth $3,500 to $5,500 per vehicle coming from GM through 2025," said GM CFO Paul Jacobson at GM's Investor Day last week. "Together, these credits could add 5 to 7 points of margin to the EVs, which puts us in a position where the tax credits are accelerating what we were already going to do and get our vehicles to ICE-like margins by 2025."
A volume of 1M EVs would account for roughly half of GM's current North American vehicle production. In 2021 the company sold 2.1M cars and trucks. Only 33,000 sales were EVs, including the Chevy Bolt and Bolt EUV. This means GM expects to increase EV sales by more than 30 times its 2021 volume.
"We believe the EV market will be even bigger by 2025 than the 17 percent share of industry that a lot of third-party forecasters are predicting," Jacobson told reporters. "And we're going to do that with great design, quality, performance, and more price points than anybody else can offer."
GM also expects its U.S. battery cell capacity to top 160 gigawatt-hours in the same timeframe. Meanwhile, its battery cell costs should decline 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 gains, the company estimates that its total revenue will increase 12 percent annually through 2025. That revenue growth will not only stem from EVs but also from software, its BrightDrop electric delivery van unit, and Cruise, the self-driving vehicle company of which GM is a majority owner. Additionally, the company has entered into a joint partnership with Honda to produce low-cost EVs.
