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General Motors Stock Gains On EV Shift Strategy, Plans To Double Revenues By 2030

GM shares moved higher Thursday after it unveiled plans to double its annual revenues by 2030.

General Motors  (GM) - Get General Motors Company (GM) Report shares moved higher Thursday after the largest U.S. automaker unveiled plans to double it annual revenue by the end of the decade.

In an investor day presentation after the close of trading yesterday, GM said plans to boost electric vehicle sales, expand its autonomous driving platform 'Cruise' and continue to produce combustion engine cars could collectively lift annual revenues to around $280 billion by 2030.

Expanded margins, which GM said will rise to between 12% and 14% by 2030, would likely mean pre-tax profits of around $39 billion as a result. CFO Paul Jacobson noted that the carmaker could commit as much as $10 billion in annual capital spending while still having enough to return cash to shareholders.

"GM has changed the world before and we're doing it again," said CEO Mary Barra. "We have multiple drivers of long-term growth and I've never been more confident or excited about the opportunities ahead."  

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GM shares were marked 1.3% higher in early trading Thursday to change hands at $54.65 each, a move that would trim the stock's six-month decline to around 9.8%.

EV revenues, GM said, will grow from around $10 billion currently to around $90 billion by the end of the decade, with a further $80 billion in "new, incremental revenue" from "connected vehicles and other new businesses".

While not abandoning the idea of producing combustion engine cars, GM's clear shift towards a reliance on EV and platform sales growth dovetails with one of the carmaker's newest investors: activist hedge fund Engine No. 1.

The San Francisco-based hedge fund, which successfully pushed for board changes at Exxon Mobil  (XOM) - Get Exxon Mobil Corporation Report earlier this year, has said it's a supporter of its planned transition to electrified vehicle production, with founder Chris James telling CNBC earlier this week that it merits a higher market valuation for the Detroit-based carmaker.

"GM, with the support of a strong management team, a great board, has decided they are going to embrace the future," he said. "They themselves can go in and disrupt and industry and be successful during this transition."