NEW YORK (Reuters) - Strong investor demand is expected to drive the pricing of General Motors Co's initial public offering to $30 per share or higher, above the initially proposed range, two people familiar with the matter said on Monday.

GM earlier filed to sell shares for $26 to $29 each.

A higher per-share price reflects growing investor confidence about the top US automaker, which emerged from a US government-financed bankruptcy last year with sharply lower costs and higher profit potential.

It would also reduce the expected losses for the US Treasury, which owns nearly 61 percent of GM as a result of its $50 billion taxpayer-funded bailout, in the first tranche of the stock sale.

"Demand is high and the range is moving up. GM is in an easy position to ask for a higher price," one of the sources said, adding that the IPO could price as high as $33 per share.

IPOs are typically priced at a 10 percent to 20 percent discount to reward investors for taking a risk on a new issue.

It is not an advantage to price shares too high. The US Treasury, for example, will have more shares to sell after cutting its stake to just over 40 percent in the IPO, and wants to ensure sufficient investor demand to exit its entire stake, sources said.

SAIC Motor Corp, GM's longtime partner in China, is set to take a stake of at least one percent in GM as part of the IPO, one source said.

GM's IPO is expected to price tomorrow and begin trading on the New York and Toronto Stock Exchanges on Thursday. At $30 per share, GM would raise about $10.95 billion in common stock.

GM has filed to sell about $10 billion worth of common stock at the midpoint, and $3 billion worth of preferred shares, but is seeing out-sized demand even before the order books close.

Based on a diluted share count of 1.9 billion, $30 per share would give GM a market value of about $57 billion. GM needs a market value of roughly $70 billion for U.S. taxpayers to break even.