General Motors is pulling a Netflix (but instead of ditching DVDs, it's ditching gas)
Major gear shift... GM is a 113-year-old company known for trucks built "like a rock." 98% of its sales and 100% of its profits come from gas-powered cars (it’s still in the money-losing phase of EVs). Large pickup trucks and SUVs are some of GM's biggest profit puppies (and biggest gas-guzzlers).
- Over the past few years, GM has been shifting gears. In November, GM said it would spend $27B on electric and autonomous vehicles by 2025.
- This month, GM unveiled its futuristic electric delivery solution, complete with electric pallets and a fresh fleet of e-vans.
- Yesterday: GM went all in, setting an ambitious 2035 target for phasing out gas and diesel-powered vehicles from its global lineup.
Sounds familiar... GM is America's largest car maker (by sales — sorry, Tesla). It's also one of the first major automakers to slap a timeline on transitioning to full-electric. But GM isn't doing this in a vaccuum: Major governments — from CA, to Japan, to the UK — have said they'll start to ban the sale of new gas-powered vehicles in the 2030s. Meanwhile, Biden has pledged $2T to clean energy innovation, with the goal of a carbon-free power sector by... 2035.
GM’s pulling a Netflix... and burning its boats. 100% of Netflix's sales pre-2007 were from DVDs. Then CEO Reed Hastings moved the entire DVD team to a separate part of the building, and went all-in on streaming. In order to disrupt itself before Tesla does, GM can't just sprinkle change into its corporate plan — it needs to burn its entire biz model.