Daily Management Review

$7 Billion Investment Of GM Pits In Direct EV Rivalry With Ford, And Tesla


$7 Billion Investment Of GM Pits In Direct EV Rivalry With Ford, And Tesla
General Motors announced a $7 billion investment in Michigan on Tuesday, much of it geared at drastically increasing manufacturing of full-size electric pickup trucks, escalating a struggle with competitor Ford Motor Co for EV supremacy in North America.
Both American automakers, on the other hand, will have to compete with current leader Tesla, which is set to establish a second plant in the United States in Austin, Texas, and is on track to sell over 1 million electric vehicles globally by 2022.
By late 2024, GM's Detroit-Hamtramck and Orion Township factories will be able to produce over 600,000 electric trucks per year, with three other sites in Tennessee, Ontario, and Mexico bringing the firm's total North American EV manufacturing capacity to over a million units by late 2025.
Ford announced in January that it will have the capacity to produce 600,000 electric vehicles annually within 24 months, including 150,000 F-150 Lightning pickup trucks, as it wants to become "the clear No. 2 electric vehicle maker in North America" behind Tesla.
Ford and its Korean partner SK Innovation said last year that they would invest more than $11 billion in new electric truck and battery operations in Tennessee and Kentucky.
Detroit-based GM is "committed to make our home state the epicenter of the electric vehicle industry", said GM’s Chief Executive Mary Barra at a press briefing on Tuesday.
The investments of GM include $2.6 billion in a new battery cell plant in Lansing with Korean partner LG Energy Solution that will serve Orion Township and other GM assembly sites after it becomes operational in the second half of 2024.
Leaders of the United Auto Workers hailed the Michigan investments on Tuesday, saying the union "stands ready to welcome new members" at the GM-LG battery factory and sister plants in Ohio and Tennessee.
President Mark Reuss announced in a press conference that GM is spending $4 billion to refurbish and expand the Orion factory, which will construct multiple types of the 2019 Chevrolet Silverado and GMC Sierra electric pickups.
Many of the facts of the new investment in Michigan have been reported in previous media reports.
Reuss would not comment on the incentives offered by Michigan to get GM to invest more than $500 million in two Lansing plants that now produce combustion-engine vehicles. Officials from Michigan claimed the state committed $824 million in incentives, which will help GM create 4,000 new jobs.
Reuss also refused to specify how long the Chevrolet Bolt EV and Bolt EUV will be manufactured at Orion. Production of the two electric vehicles would "continue during the plant's changeover," according to a GM press release.
Ultium Cells, the GM-LG joint venture, is building identical facilities in Lordstown, Ohio, and Spring Hill, and the Lansing battery cell plant will be the third in the United States. A fourth battery facility in North America is in the works.
GM had announced in June that it would increase investment in electrified and driverless vehicles to $35 billion by 2025, a 30 per cent increase over its previous prediction.
Separately, Michigan Governor Gretchen Whitmer announced that a combined $2,500 refund for the purchase of an electric vehicle and charging equipment is being considered. GM and Tesla have already exceeded the $7,500 barrier for a federal EV tax credit, but Congress is considering raising the cap and increasing federal credits to $12,500.
GM said last June it would boost electric and autonomous vehicle spending to $35 billion through 2025, a 30 per cent jump over its prior forecast.
Separately, Michigan Governor Gretchen Whitmer said she is proposing a combined $2,500 rebate for the purchase of an electric vehicle and charging equipment. GM and Tesla have both exceeded the threshold for qualifying for a federal EV tax credit of $7,500 but Congress is considering lifting the cap and expanding federal credits for up to $12,500.