Robo

GM hopes to double revenue by catching up to Tesla in the EV race and rolling out robotaxis

Thursday, October 7, 2021 by Robinhood Snacks | Disclosures
Robotaxi drivers tell great jokes [Igor Alecsander/E+ via Getty Images]

Robotaxi drivers tell great jokes Igor Alecsander/E+ via Getty Images

Putting the EV in rEVolution… General Motors kicked off a two-day investor event yesterday by outlining bold plans to double annual revenue to $280B by 2030. GM says all its cars will be electric by 2035, and its eHummer goes on sale this fall. But EVs are only the start: GM says growth will come from services, like its fleet of Chevy Bolt autonomous EV taxis.

Your robotaxi has arrived… And it’s powered by GM. Cruise — an AV startup majority-owned by GM that counts Honda, Walmart, Microsoft, and Softbank as investors — is key to GM’s software-centric strategy. Here’s why:

  • Cruising past Waymo: Cruise became the first robotaxi biz permitted to collect fares with no safety driver last month, beating Google-owned robotaxi rival Waymo.
  • Robo-revenue: GM, which already signed a deal to sell a robotaxi fleet to Dubai, says robotaxi revenue will soon hit $50B — more than 30% of GM’s 2020 sales. Cruise was last valued at $19B in 2019, and Waymo at $30B in 2020.
  • Connected everything: Robotaxis are just one application of GM’s auto tech. Walmart already uses Cruise self-driving tech to deliver groceries, and GM plans to launch in-car subscriptions through its Ultifi operating system in 2023.
THE TAKEAWAY

Tech-enabled mobility platforms > car companies... even EV car companies. Tesla is worth 10X GM — even though it delivered 10X fewer cars last year — because investors value Tesla like a tech company, not like a carmaker. Now GM’s gunning for its own sky-high tech valuation by investing big bucks to take Tesla’s crown as America’s EV giant. But since that could take years, GM is also tapping revenue streams Tesla hasn’t touched, like robotaxis and driverless delivery services.