General Motors' announcement last week that it will stop making gas-powered cars, trucks and sport utility vehicles by 2035 and become carbon-neutral by 2040 is even bolder than it sounds: The repercussions will ripple broadly across the economy, accelerating the transition to a broader electric future powered by renewable energy.

The pledge by the nation's largest automaker to phase out internal combustion engines puts pressure on other auto companies, like Ford and Toyota, to make equally ambitious public commitments. It follows an earlier announcement by GM that it would invest $27 billion in electric vehicles over the next five years.

While every major auto company is investing in zero- and low-emission vehicles, amounting to $257 billion worldwide through 2030, until now none had been willing to say when they would end production of gas-powered cars. Wall Street rewarded GM's clarity by bumping its stock. Now investors will expect the rest of the industry to explain how their electric vehicle strategies measure up.

GM's decision is a sea change. For decades, the company and other automakers resisted pollution rules. As recently as last year, GM supported the Trump administration's relaxation of fuel efficiency standards, only to make an about-face after the November election. When one of the most recalcitrant and iconic American companies so markedly changes its tune and embraces the clean-energy transition, something big is happening. Pressure will undoubtedly mount on oil and gas companies, among others, to produce credible energy transition plans of their own.

The plan by GM's chairman and chief executive, Mary Barra, will also mean big changes for auto design and manufacturing, and for the auto supply chain. Suppliers must now pivot away even more intently from making traditional transmissions and engines to producing the advanced batteries, motors and power systems electric vehicles need. And car dealers, after years of pushing gas-guzzling sport utility vehicles, must now aggressively market electric cars to consumers.

Phasing out the gas-powered cars and trucks that many people drive will cause demand for gasoline to drop steadily over the next few decades, cutting into oil and gas industry profits. Gasoline is the most consumed petroleum product in the U.S., with light-duty vehicles accounting for more than 65% of total on-road fuel consumption. If medium- and heavy-duty trucks that burn diesel also transition to lower-polluting fuels, demand for oil will drop further. In the short term, the oil and gas industry can absorb lower demand for certain petroleum products, but in the long term, it will need to rethink its business model.

Politically, GM's pledge also further isolates the U.S. oil and gas industry, which has, on the whole, been too slow and reactive on climate change. Corporate leaders across the economy increasingly recognize that climate change requires a societal response and are positioning their companies to be part of the solution. Investors, employees and others seeking to slow global warming will demand as much.

Strikingly, GM's announcement comes at a time of low oil and gasoline prices — there's no market pressure on consumers to buy efficient cars. Indeed, after a decade of rapid growth, the share of electric vehicles in the global car market is still only around 3%. But the price of electric cars is falling. Their design is improving, and anxiety over the distance they can travel is receding, so the difference between buying an electric car and a gas-powered car will shrink. GM knows this and is counting on it.

Barra's strategic bet is that consumers can be persuaded to love electric alternatives the way they already love their gasoline-powered Tahoes, Suburbans and Trailblazers. (Tesla has proved that electric vehicles can be exciting, even for those who don't care about climate change. No wonder its market value is soaring.) By 2025, GM will introduce 30 all-electric vehicle models worldwide, and 40% of its U.S. models are projected to be zero-emission. Electric vehicles will also be more affordable and cost-effective over time, thanks to declining initial costs and fuel savings.

GM's plan will also have repercussions for the electricity sector, which must fortify the nation's three grids to power all of these plug-in vehicles. Shifting from gasoline to electricity helps to decarbonize transportation only if the electrons fueling cars and trucks are relatively "green."

To bring more wind and solar power onto the U.S. grids, utilities will need to build more transmission lines. In areas with high electric vehicle use, they will have to upgrade local distribution equipment. Utilities must also help customers acclimate by making charging seamless, ensuring it is widely available and affordable for everyone.

That means public charging stations must be built in sufficient numbers for people to charge their cars conveniently, where they work, shop and play. The electricity grids may also require an even higher level of resilience from threats like storms and outside meddling, as customers become increasingly dependent on utilities to power not just their homes and gadgets but also their vehicles.

The final ripple effect will be felt by government. GM's ambition may push the Biden administration to be equally daring when setting greenhouse gas and fuel efficiency standards for cars and truck, which Biden has promised to strengthen. It may also encourage the European Commission, now revising its 2030 standards, to aim higher.

The clean-energy transition needs private-sector leadership as much as it needs government action. Having the auto companies involved in this effort will create new urgency and build momentum among utility companies to quickly and economically make the grid more sustainable. GM's announcement was more than a surprise; it is a game-changer.

Jody Freeman is a professor at Harvard Law School, where she teaches environmental law. She was counselor for energy and climate change in the Obama White House in 2009 and 2010 and advised the Biden transition team. She is an independent director on the board of ConocoPhillips, a producer of oil and natural gas. She wrote this article for the New York Times.