GM aims to end sale of gasoline and diesel powered vehicles by 2035

In a significant development, General Motors Co said, all of its new cars, including light pickup trucks, and SUVs will have zero tailpipe emissions by 2035.

The development marks a significant shift away from diesel and gasoline powered engines by the biggest U.S. automaker.

GM has also said, it plans on becoming carbon neutral by 2040. The announcement comes just a week after President Joe Biden took the oath of office. Bidden has pledged to tackle greenhouse gas emissions and boost sales of electric vehicles (EVs).

Although GM sold 2.55 million vehicles in the United States in 2020, only 20,000 of them were EVs. In November 2020, it said it was investing $27 billion in electric and autonomous vehicles over the next five years, up from $20 billion before the coronavirus pandemic.

Following the announcement, GM’s stock rose by 7.4% and closed up by 3.5%.

GM’s CEO Mary Barra has strategically pushed GM to embrace electric vehicles and shift away from gasoline-powered vehicles.

In a statement Barra said, the automaker had worked with environmental advocacy group, the Environmental Defense Fund (EDF), to “develop a shared vision of an all-electric future and an aspiration to eliminate tailpipe emissions from new light-duty vehicles by 2035.”

According to Morgan Stanley auto analyst Adam Jonas, the decision is “based principally on economic grounds… Would GM decide to wind down a business in under 15 years if it truly felt it would spin off cash and provide positive economic value?”

Jonas went on to add, investors should look for most if not all automakers “to follow GM’s precedent.”

California Governor Gavin Newsom termed GM’s announcement a “gamechanger”.

Last week, the Biden Administration directed U.S. agencies to reconsider Trump emission rollbacks and the revocation of California’s emissions authority.

GM is “open to working with California and the Biden Administration to achieve agreement on a national standard and complementary policies to accelerate the electrification of the light-duty transportation sector,” said the company in a separate statement.

GM has reaffirmed its commitment to produce zero-emission vehicles.

“We’re taking actions so that we can eliminate tailpipe emissions by 2035,” said Dane Parker, GM’s chief sustainability officer. “Setting a goal for us 15 years from now is absolutely reachable.”

“with this extraordinary step forward, GM is making it crystal clear that taking action to eliminate pollution from all new light-duty vehicles by 2035 is an essential element of any automaker’s business plan,” said EDF President Fred Krupp.

In a statement GM stated, it will source 100% renewable energy to power its U.S. sites by 2030 and global sites by 2035, five years ahead of a prior goal.

More than 50% of GM’s capital spending and product development team will be devoted to electric and electric-autonomous vehicle programs, said GM.

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