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GM plans more than $ 3 billion in electric vehicle projects in Michigan

General Motors Co.

GM 6.02%

plans to invest more than $ 3 billion in electric vehicle manufacturing in Michigan.

GM finalizes plans for two electric vehicle projects in Michigan. Its Orion assembly plant in suburban Detroit would be rebuilt to serve as a hub for the production of electric pickups, said people who know about the plans. The renovation would cost at least $ 2 billion and is expected to create more than 1,500 jobs in the factory, which is now underutilized, people said.

The automaker also plans to build a battery cell factory near one of its assembly plants in Lansing, Michigan, people said. This project, which is a 50-50 joint venture between GM and its battery partner LG Energy Solutions, would split more than $ 2 billion between GM and LG and create around 1,200 jobs, people said.

GM officials are in talks with local governments to get tax breaks and other permits for the projects, and the plans could fail or be changed, people said.

“GM is in the early stages of developing a business case for potential future investment in multiple locations, including the Orion community,” the Detroit-based company said in a statement Friday. “We are holding discussions with the responsible local officials about potential incentives.”

GM stock rose about 6% on Friday to close at $ 63.21.

Automakers are rushing to secure future battery supplies as the industry prepares to launch dozens of new plug-in models over the next several years. According to an investor announcement from Credit Suisse on Friday, electric vehicles accounted for only about 4% of US vehicle sales and about 8% of global sales this year through November.

But sales are rising rapidly as automakers introduce new models and governments around the world tighten restrictions on tailpipe emissions. Credit Suisse predicts that by 2025, electrics will account for 24% of global new car sales, up from an earlier forecast of 17%.

Toyota engine Corp.

plans to spend $ 1.25 billion on a new battery plant in rural North Carolina, according to a public incentive deal approved Monday. Ford Motor Co. announced in September that it would invest more than $ 11 billion to build three battery plants, two in Kentucky and one in Tennessee, near Memphis, and an electric truck plant, the first new U.S. assembly plant since Decades.

GM’s proposed investments would be remarkable for Michigan, especially after Governor Gretchen Whitmer expressed disappointment that the state was not selected for Ford’s projects. Her office declined to comment on possible future projects.

General Motors plans to phase out almost all of its gasoline and diesel vehicles by 2035. At the forefront of this transition is the first all-electric Cadillac. WSJ’s Mike Colias visited a GM test site for a drive and an exclusive interview with GM President Mark L. Reuss. Photo illustration: Alexander Hotz

Much of the recent surge in electric vehicle investment has been in the southern and western states, shifting focus away from the traditional auto stronghold of the upper Midwest.

In addition to the recent moves from Toyota and Ford, Volkswagen has AG

ramped up electric vehicle production at its Chattanooga, Tennessee facility. Polestar, the electric vehicle company of Chinese automaker Zhejiang Geely Holding Group Co., makes automobiles in South Carolina. Tesla has announced that it will begin producing vehicles at its new facility in the Austin, Texas area by the end of the year.

Some high-profile electric vehicle startups are also based outside of the Midwest, including the Lucid Group Inc.,

that recently started manufacturing automobiles at its Arizona factory.

GM’s investment would be part of its $ 35 billion spending on electric and autonomous vehicles through 2025. The automaker has announced that it will eventually outperform market leader Tesla in US sales of electric vehicles.

The battery factory planned for Michigan would be the third for GM’s joint venture with Korean LG. The joint venture looked to the other factories outside of GM’s home state: one in Ohio due to open next year and another in Tennessee that is in the works.

GM, which has long had excess factory space in the US, plans to convert existing factories to build electric cars instead of gas or diesel-powered cars, although in some cases both will be made at the same facility, executives said. The company has announced that it will save at least $ 10 billion by 2030 by remodeling factories rather than building new ones.

“We can use the existing advantages and move forward faster [factory] Footprint that we have, ”said GM chief Mary Barra on Thursday during an event hosted by the Automotive Press Association.

Ford, which has less idle factory space in the US than GM, is taking a different approach with its plans to build EVs from scratch.

It is building the factory near Memphis on a huge site that will also house a battery factory. It also recently set up a smaller plant near its headquarters in Dearborn, Michigan to manufacture F-150 electric pickup trucks.

Write to Mike Colias at Mike.Colias@wsj.com

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