General Motors (GM) said on Thursday it was setting a goal to sell all its new cars, sport utility vehicles (SUVs) and light pickup trucks with zero tailpipe emissions by 2035, a dramatic shift by the largest U.S. automaker away from gasoline and diesel engines. 

GM, which also said it plans to become carbon neutral by 2040, made the dramatic announcement just over a week after President Joe Biden took office pledging to tackle greenhouse gas emissions and boost sales of electric vehicles (EVs). 

GM sold 2.55 million vehicles in the United States last year, but only about 20,000 were EVs, the Chevy Bolt hatchback. It said in November it was investing $27 billion in electric and autonomous vehicles over the next five years, up from $20 billion planned before the coronavirus pandemic. 

Chief Executive Mary Barra has aggressively pushed GM to embrace electric vehicles and shift away from gasoline-powered vehicles. 

She said in a statement the automaker had worked with the Environmental Defense Fund (EDF), an environmental advocacy group, to "develop a shared vision of an all-electric future and an aspiration to eliminate tailpipe emissions from new light-duty vehicles by 2035."

Morgan Stanley auto analyst Adam Jonas said the decision is "based principally on economic grounds ... Would GM decide to wind down a business in under 15 years if it truly felt it would spin off cash and provide positive economic value?"

Jonas added that investors should look for most if not all automakers "to follow GM's precedent." 

In September, California Governor Gavin Newsom said the state plans to ban the sale of new gasoline-powered passenger cars and trucks starting in 2035. Several states, including Massachusetts, say they plan to follow suit. 

GM and other major automakers sided with Trump last year in a legal challenge to his rollback of federal vehicle emissions standards through 2026. 

GM also said it will source 100 percent renewable energy to power its U.S. sites by 2030 and global sites by 2035, five years ahead of a prior goal. 

More than half of GM's capital spending and product development team will be devoted to electric and electric-autonomous vehicle programs, GM said.