General Motors has been reporting a decline in revenue for a few years now. In June 2022, the company recorded a 40% decline in profit over the past three months. Increasing inflation and costs of automotive parts and materials are the two major factors that contributed to the decrease in profits, affecting the revenue and profitability of the company.
The company is diversifying into other segments as part of a new strategy to overcome declining revenue and profits.
General Motors is devising strategies to move beyond the automotive business and diversify into the new, lucrative segment. The company is making a foray into energy management services through its new business unit, GM Energy. General Motors is developing a strategy to collaborate with established companies in the energy management sector and harness their technological expertise.
With the entry into a new industry, General Motors is expected to face stiff competition from Tesla Energy, which has already established itself in the energy management services industry. General Motors stated its intention to overtake Elon Musk’s Tesla in the vehicle segment, and the two companies will now be competing in the energy segment as well.
The increasing price of electricity is fueling the demand for energy management products and services. This factor is expected to result in an increase in profitability for General Motors in the years to come.
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