GM to spend $6.6 billion on EV plant investments in bid to dethrone Tesla in electric car sales by 2025

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DETROIT – General Motors said it will invest roughly $6.6 billion in its home state of Michigan through 2024 to increase electric pickup-truck production and build a new EV battery cell plant.

The new spending is part of a plan to increase GM’s North American production capacity to build 1 million electric vehicles by 2025, the automaker announced Tuesday.

GM has projected it will overtake Tesla as the top U.S.-based seller of electric vehicles by mid-decade. The investments are part of the $35 billion the company 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 statement.

GM CEO Mary Barra announces Tuesday, Jan. 25, 2022 an investment of more than $7 billion in four Michigan manufacturing sites.

Photo by Steve Fecht for General Motors

GM has a lot to catching up to do in just three years. 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.

Industry forecaster LMC Automotive expects Tesla’s U.S. production capacity to increase from about 580,000 units to about 1 million later this year after its second domestic plant in Texas is fully online.

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.

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

GM is using the name Ultium for its next-generation batteries and electric vehicle platform and technologies. It estimates the 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 three seconds. The cells are uniquely contained 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.

Separately, President Joe Biden used GM’s investment announcement on Tuesday to tout his administration’s economic strategy in “helping power an historic American manufacturing comeback.”

“From day one, my administration has been laser focused on making sure that America leads the manufacturing future of electric vehicles,” Biden said in a statement. “This announcement is just the latest in over $100 billion of investment this past year in American auto manufacturing to build electric vehicles and batteries.”

Biden has been a proponent for EVs as well as retaining domestic manufacturing of their supply chains. His Bipartisan Infrastructure & Jobs Act included $7.5 billion for EV chargers. He’s also pushing the goal that automakers’ EVs sold in the U.S. account for half of total new auto sales by 2030.

A battery pack and GM’s new Hummer EV stand outside an event where General Motors announced an investment of more than $7 billion in four Michigan manufacturing sites on January 25, 2022 in Lansing, Michigan.

Jeff Kowalsky | AFP | Getty Images

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