General Motors (GM) - Get General Motors Company (GM) Report said Thursday that it planned to be "carbon neutral" by 2040 and phase out gasoline and diesel cars by 2035, a move one analyst said was "a very bullish signal" to the electric-vehicle sector.
Shares of the Detroit company were rising 3.9% to $51.59.
"General Motors is joining governments and companies around the globe working to establish a safer, greener and better world," Chairman and CEO Mary Barra said in a statement.
"We encourage others to follow suit and make a significant impact on our industry and on the economy as a whole."
GM said that globally by mid-decade it would offer 30 all-electric models, and by the end of 2025, 40% of the company's models offered will be battery electric vehicles.
The company said it was investing $27 billion in electric and autonomous vehicles in the next five years – up from the planned $20 billion before the onset of the Covid-19 pandemic.
["This] is a very bullish signal for the EV sector domestically," Wedbush analyst Dan Ives said in an investors' note.
Ives said that with President Joe Biden's Green Agenda on the horizon, other automakers "could follow GM's lead domestically with Tesla continuing to run away with market share in this EV arms race."
"A Biden White House and Blue Senate is very bullish and a potential 'game changer' for Tesla and the overall EV sector in the U.S., with a more green-driven agenda now certainly in the cards for the next few years," Ives said.
Earlier this week, Biden said he planned to replace the government's fleet of cars and trucks with electric vehicles assembled in the U.S.
Biden signed several executive orders to address climate change, including establishing climate change as a national security priority, conserving at least 30% of federal land and oceans by 2030, and canceling new oil and gas leases on public lands and water.
"[A] doubling down on EV tax credits and further consumer incentives and government initiatives around the EV sector will be on the horizon," Ives said.
GM also signed the Business Ambition Pledge for 1.5-degree Celsius, which is a call by a global coalition of United Nation agencies, business and industry leaders to protect the environment.
The 2015 Paris Agreement, which the U.S. rejoined on Biden's first day in office, sets a collective goal to limit global warming to below 2-degrees Celsius, preferably 1.5-degrees Celsius, compared with preindustrial levels.