General Motors will stop producing vehicles that run on gasoline or diesel fuel over the next 14 years, replacing the fleet with all-electric cars, SUVs and light trucks, CEO Mary Barra announced Thursday.
Barra also promised the company would be net carbon-neutral by 2040, reducing the greenhouse gas pollution it produces and purchasing carbon offsets to make up for existing emissions.
The announcement, made on LinkedIn, puts a timeline onto GM's previously stated commitment to electric vehicles. Barra has often stated that the company was "all in" on an electric future.
"For General Motors, our most significant carbon impact comes from tailpipe emissions of the vehicles that we sell – in our case, it's 75 percent. That is why it is so important that we accelerate toward a future in which every vehicle we sell is a zero-emissions vehicle," Barra wrote.
The announcement does not apply to heavy-duty vehicles, such as commercial trucks. But it marks a radical shift for the U.S.' largest automaker. GM, which makes Buick, Cadillac, Chevrolet and GMC vehicles, had previously in its attempt to stop California from setting its own emissions standards. GM last November, and encouraged other automakers to follow suit.
Gasoline- or diesel-burning vehicles today make up 98% of GM's sales and all of its profit, the Wall Street Journal reported.
As part of the pivot, the company will offer 30 electric vehicle models for sale by 2025, and will spend $27 billion on what's called the EV market over the next four to five years, Wedbush analysts wrote in a note, adding that GM's announcement could set off an "arms race" for clean cars.
"With the Biden Green Agenda on the horizon, we believe other automakers could follow GM's lead domestically with Tesla continuing to run away with market share in this EV arms race," the analysts wrote.
GM's stock jumped 4% following the announcement. Tesla shares fell about 2.7% for the day.