GM to spend $6.6 billion on EV plant investments in bid to dethrone Tesla in electric car sales by 2025
Mary Barra, chief executive officer of General Motors Co., presents the new Silverado elective vehicle during a live-streamed event at the CES 2022 trade show in Las Vegas, Nevada, U.S., on Wednesday, Jan. 5, 2022.
Bridgett Bennett | Bloomberg | Getty Images
DETROIT – General Motors will invest roughly $6.6 billion in its home state of Michigan over the next several years to increase electric pickup truck production and build a new EV battery cell plant.
The new investments are part of a plan to increase GM’s North American production capacity for electric vehicles to 1 million units by 2025, the automaker announced Tuesday.
GM has said it will overtake Tesla as America’s top seller of electric vehicles by mid-decade. The investments are part of the $35 billion GM has pledged to spend on EVs by 2025.
“We will have the products, the battery cell capacity and the vehicle assembly capacity to be the EV leader by mid-decade,” GM CEO Mary Barra said in a release.
GM has a lot to catching up to do by 2025. Tesla, which does not release U.S. sales specifically, delivered 936,172 electric vehicles globally in 2021. GM sold less than 25,000 EVs last year — ranking third in U.S. EV sales behind Tesla and Ford, which sold 27,140 of its Mustang Mach-E EVs.
Auto insights and forecasting firm LMC Automotive expects Tesla’s U.S. production capacity to increase from about 580,000 units to about 1 million later this year, when its second domestic plant in Texas comes fully online later this year.
EV trucks
The investments announced Tuesday include $2.6 billion for a new battery plant though a joint venture with LG Energy Solution in Lansing, Mich. and $4 billion to convert its Orion Assembly plant in suburban Detroit to produce electric trucks such as upcoming versions of the Chevrolet Silverado and GMC Sierra beginning in 2024.
GM on Tuesday also announced an additional $510 million in investments in two Lansing-area vehicle assembly plants to upgrade for current, non-electric vehicles.
Many of the new investments had previously been reported, but GM hasn’t disclosed how many vehicles it hopes to build by 2025, a production timeline or the products that will be built at Orion. The influx of capital is expected to create 4,000 new jobs and retain 1,000 current employees.
“Michigan will be the recognized hub and leader of innovation in the U.S. for EV R&D and manufacturing,” GM President Mark Reuss said during a media briefing.
Orion Assembly and GM’s Factory Zero plant in Detroit are expected to build a majority of the 1 million units electric vehicles in North America, according to Reuss. Orion is expected to be able to produce 360,000 vehicles annually by mid-decade. Factory Zero is targeting 270,000 units. GM is also converting plants in Tennessee, Canada and Mexico to build EVs.
GM projects it will convert 50% of its North American assembly capacity to EV production by 2030 – five years ahead of a plan to exclusively offer light-duty electric vehicles by 2035.
Production is now set to begin at the former Detroit-Hamtramck assembly plant, less than two years after GM announced the massive $2.2 billion investment to fully renovate the facility to build a variety of all-electric trucks and SUVs.
Photo by Jeffrey Sauger for General Motors
Battery plant
The new 2.8 million-square-foot battery plant with LG is expected to open in late 2024. It is the third such facility to be announced in the U.S. by GM. A battery plant in Lordstown, Ohio is expected to come online later this year, followed by another in Tennessee in 2023. At least one other plant is expected to be announced by GM in the foreseeable future. The plants are through a joint venture with LG called Ultium Cells LLC.
Battery cell production is a crucial part of the supply chain for electric vehicles. Aside from Tesla, which has massive Gigafactory battery plants in Nevada, China and another under construction in Germany, automakers largely outsourced such production to third-party suppliers. Automakers are now scrambling to team up with suppliers to have better control over the battery cell production as well as the raw materials needed for the batteries.
GM is using the name Ultium for its next-generation batteries and electric vehicle platform and technologies. The automaker estimates its proprietary cells will be capable of a range of up to 450 miles or more on a full charge with 0-60 mph acceleration in 3 seconds. The cells are uniquely in pouches as opposed to most used today that are in cylinders.
Michigan’s economic development board on Tuesday approved $824 million in incentives and assistance for GM’s investment, according to the Associated Press.
