For General Motors, the future goes electric. The American manufacturer has thus just announced the largest investment in its history, of nearly 7 billion dollars, with the objective of greatly increasing its production capacity of electric vehicles in the United States.
General Motors betting on historic stronghold, Michigan
These 7 billion dollars are divided into different investments. The first is $2.6 billion to build a third Ultium plant in partnership with LG in the city of Lansing, Michigan; the two companies have already established one in Ohio and a second in Tennessee. The facility will be responsible for the production of batteries for the automaker’s electric vehicles and is expected to come into operation at the end of 2024. The manufacture of batteries in-house is a very important factor for manufacturers who are expanding into electric, it allows them to better control the supply chains, but also to guard against possible shortages.
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General Motors also announced the release of $4 billion to convert its Orion assembly plant in Detroit. It will focus on the production of the company’s next electric pick-ups: the Chevrolet Silverado EV and the GMC Sierra. It should also enter into operation in 2024. Finally, the manufacturer also plans to invest around 500 million dollars in two assembly plants near Lansing, still in Michigan.
This project should lead to the creation of 4,000 jobs in the midwestern state, the historic automotive bastion of the country and the birthplace of General Motors, which has however lost its luster for several decades already. Today, manufacturers also prefer states located in the south, like North Carolina, Tennessee or Kentucky. ” This is great news for us and for Michigan, the epicenter of the work we are doing on electric vehicles. Michigan will be the recognized center and innovation leader in the United States for research and development and manufacturing of electric vehicles said Mark Reuss, company executive.
General Motors’ headquarters are in Detroit, Michigan. Photography: Creative Hina By.Quileen / Unsplash
General Motors wants to surpass Tesla
This announcement is part of an even broader investment plan described by the manufacturer last October. It plans to spend 35 billion dollars by 2025 with the ambition of achieving the production of more than 1 million electric vehicles per year. The manufacturer is giving itself the means: in addition to this new roadmap, it is already working on the conversion of other factories located in Tennessee, as well as in Canada and Mexico to build electric vehicles.
General Motors does not hide its ambition; the firm wants to surpass Tesla on its own ground by selling more electric vehicles than the firm of Elon Musk. A task that nevertheless seems difficult to accomplish since the latter signed a record year 2021, and that its production capacity should further expand when its gigafactory in Texas comes into operation. Currently, General Motors offers three electric models and ranks third among electric vehicle sellers across the Atlantic, behind Tesla and Ford, with 25,000 units sold in 2021. Electric vehicles accounted for only 2% of sales of the manufacturer last year, reports the wall street journal.
It is also important to note that General Motors is aiming for carbon neutrality in 2040. This means that it will have to stop marketing diesel or gasoline vehicles around 2035. Having a strong production capacity for electric vehicles but also batteries is therefore an essential element of its future.
One of the biggest changes in automotive history
General Motors’ investment did not go unnoticed and was even praised by Joe Biden. ” From day one, my administration has been focused on making sure America leads the future of electric vehicle manufacturing. The announcement is just the latest in a series of more than $100 billion investments made last year in U.S. auto manufacturing to build electric vehicles and batteries the president said in a statement. The transition from diesel to electric is also part of the program of the Democrat, who announced in 2021 an investment of 7.5 billion dollars to install charging stations in the country.
With these announcements, General Motors shows the color and demonstrates that it does not want to miss out on its transition to electric, which represents one of the most important changes in the history of the automobile. Indeed, many experts are concerned about the ability of historical players in the sector to adapt to the new challenges of electricity: the more they prepare in advance, the more likely they are not to miss the boat.