As they transition into electric vehicles, legacy auto companies like GM are trapped between the need to invest heavily into EVs and the feeling of responsibility to shareholders to remain profitable.
EVs do not sell profitably at the beginning. That part of their business will be operating at a loss while they ramp up to achieve economies of scale. In the meantime, they're completely dependent on their ICE business to keep themselves afloat, which will very rapidly lose demand in the coming years as EVs become cheaper to buy and own.
The solution is simple: they need to invest heavily into ramping up their EV sector. Very heavily. The issue is that there are short-term oriented shareholders who will not take too kindly to their companies losing profitability. They want to see profits. But profits don't matter. Scale matters. Ramping up matters. But shareholders won't see it that way.
Auto companies that commit to ramping up EVs, fast, despite losing profits, can survive the transition. Others won't.
GM has plans to go full electric by 2035, because they don't want their EV investments to interfere too much with profit-taking, and I believe they'll bankrupt themselves in doing so. Their ICE car business will lose profitability while their EV business will be insufficiently ramped up to be profitable in time. 2035 is just too long a time horizon.
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