© Reuters. The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. Picture taken March 16, 2021. REUTERS/Rebecca Cook

By Norihiko Shirouzu

SHANGHAI (Reuters) – General Motors Co (NYSE:) said on Monday it expanded its design studio in China, which will focus only on developing electric and connected cars and no longer design petrol vehicles.

The move comes as the largest U.S. automaker prepares to cut out petrol and diesel vehicles from its fleet by 2035 and underscores its efforts to gain a bigger foothold in China, the world’s largest electric car market.

It also plays into GM’s ambitions of adding a recurring revenue stream from software and services long after the initial product is sold, a la Apple Inc (NASDAQ:), by selling EV battery charging and swapping services for example.

GM has said it wants to exceed annual sales of 1 million electric vehicles (EV) in the United States and China by 2025. Last month, the company said it would boost spending on electric and autonomous vehicles, shelling out $35 billion through 2025, up 75% from March 2020 before the COVID-19 pandemic choked the industry.

With new facilities and the studio’s growing team of employees, “we have the right organizations and people to bring the most desirable products to China’s consumers,” Julian Blissett, executive vice president and president of GM China said in a statement.

The new advanced design studio – one of three around the world that designs future generation GM vehicles – was built by redesigning the existing studio on the same campus as GM’s China tech centre in Shanghai.

GM said it nearly doubled the studio to 5,000 square metres, and is hiring to expand the design team. The company did not say how many employees will be added.

A person close to the automaker said the team currently has fewer than 40 designers, digital and physical modelers, virtual reality experts, and support personnel.

GM, which sells cars in China through its two joint ventures with state-owned SAIC Motor Corp, sold 170,000 all-electric vehicles in China last year, up from 50,000 in 2019.

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