Mary Barra says investors will reward General Motors for its investments in electric vehicles and self-driving cars.
Her comments Thursday at Morgan Stanley’s investor conference came as GM continues to see increases in its sales and returns from its investments in mobility and autonomous driving.
GM has also boosted its share price this year to $41, up from around $35 a year ago. The company’s market capitalization is $90 billion.
“The investment we are making in self-driving cars and electric vehicles is capital efficient,” Barra said, noting that the company saved more than $2 billion in production costs last year alone by using self-driving and electric vehicles.
“I’m confident in the returns we can earn. There are massive cost savings,” she said.
A Morgan Stanley analyst asked Barra to confirm GM will be able to reduce manufacturing costs by a further $5 billion over the next five years.
“I can’t comment,” Barra said. “We have great cost savings, but we are making investments because we think our shareholders will be better off if we do.”
She added that self-driving cars, electric vehicles and autonomous driving will be “key growth drivers” for GM in the future.
A growing number of automakers and tech firms are investing in self-driving cars and other transportation technology in order to reduce the global emissions of greenhouse gases and to appeal to fickle customers.
Volkswagen AG’s investment in the self-driving vehicle division of Silicon Valley’s Waymo is one of the most high-profile efforts. Ford Motor Company and Chinese carmaker Baidu are also making major investments in self-driving cars.
GM is counting on the growth of sales of electric vehicles to offset some of the losses it will incur from layoffs of up to 5,000 white-collar workers in the wake of Trump’s tariffs on imported steel and aluminum.
In 2016, GM posted about $6 billion in profits, with $1.7 billion coming from North America and $4.4 billion from China.
GM has more than 11,000 employees in Silicon Valley, including about 2,500 in the self-driving car unit.
Another 27,000 employees work in Detroit.