Investment plan

GM launches $10 billion investment plan to build electric trucks and batteries

General Motors has helped Americans buy gas-guzzling trucks and SUVs that have been a disaster for the climate. Now, it’s getting serious about turning to electric vehicles amid increased electrification efforts by other major automakers. On Tuesday, the automaker said it would invest about $7 billion (Australian $10) to set up a new electric vehicle battery production plan in Michigan. It will also transform another factory already in operation into a major producer of electric trucks.

On the battery side, GM said it was partnering with electric vehicle battery maker LG Chemical and spending $2.6 billion (A$4 billion) to develop a new battery cell manufacturing plant that would , according to the company, could go live by 2024. Most of the investment (approximately US$4 billion (A$6 billion)) goes to converting an existing plant to serve on the main development site for the company’s Chevy Silverado EV and electric GMC Sierra. Yes, they will still make monstrous vehicles. But hey, if that’s what it takes to kill the internal combustion engine…

In a statement, GM President and CEO Mary Barra said the company’s investment decision was made based on “the positive consumer response and reservations for our recent electric vehicle launches.”

GM also had a little help along the way. According to the New York Times, the state of Michigan is providing GM with US$824 million (A$1,144) in economic incentives. In return, the company says the new investment could create 4,000 new jobs.

The company joins a growing list of U.S. automakers said to be turning to electric vehicles. Ford, GM’s biggest competitor, has reportedly seen a flurry of enthusiasm for its reasonably priced new F-150 Lightning. It also announced that it would spend US$11 billion (Australian $15) to build three new battery factories. Stellantis – the parent company of American icons Chrysler, Dodge, Jeep and Ram – has meanwhile announced plans to spend at least $35.5 billion (A$49) to develop electric vehicles and related technologies until 2025.

The flurry of announcements comes after the Biden administration set an ambitious goal of ensuring that electric vehicles will account for half of all new car sales in the United States by 2030. The automakers’ new commitments automobiles are a good start toward that goal, but anyone who’s spent more than a few minutes on a major American highway lately will know there’s still a long way to go.

The United States also lags far behind other parts of the world in electric vehicle adoption, according to research firm Canalys. In the first half of 2021, electric vehicles accounted for just 3% of new car sales in the United States. That’s an improvement over previous years, but still well below 12% and 15% of new car sales. Electric vehicles represented in China and Europe respectively during this same time.