With wide-spread electrification becoming an inevitability, all three of Detroit’s automakers are making serious moves to expand their EV production capabilities. Just a few weeks ago, the Ford Motor Company announced they were upping their investment into electric vehicle development and production from $22 billion to $30 billion through 2025. Not ones to be outdone by a crosstown rival, General Motors is now following suit. Just this morning, the Detroit automaker has announced a commitment to spending $35 billion on future electric and autonomous vehicle programs through 2025, a 30 percent increase over previous targets. Included in this spending is the addition of two new electric vehicle battery plants in Ohio and Tennessee.
Back in March 2020, General Motors announced plans to invest $20 billion from 2020 through 2025 to accelerate its transition to EVs and AVs. Then, by November 2020, the company increased its planned investment over the same period to $27 billion. Now it’s $35 billion through 2025. Money appears to be no object here.
General Motors Announces More EV Battery Plants
GM President Mark Reuss hinted at the automaker’s plans to build new battery facilities earlier this week, with his comments later being confirmed by General Motors. The automaker did acknowledge that they are looking to build two new facilities at a cost of around $2 billion each, but the company has yet to finalize locations. These new electric vehicle battery plants are not to be confused with the LG Chem plants currently on order in Ohio and Tennessee.
Of course the business side of this discussion doesn’t end there. General Motors CEO Mary Barra is set to meet with high-ranking Democrats today to further discuss electric vehicles and emissions regulations, which appears to hold the unintended consequence of what’s sure to be a cataclysm event for the performance aftermarket.
Congress members on the docket for today include House Speaker Nancy Pelosi, Richard Neal, Frank Pallone, and Michigan Democrats Dan Kildee and Debbie Dingell. Considering Barra helms the country’s largest automaker, this sort of meeting is to be expected as we move towards the electric vehicle era. We do need some intervention from the government here however, especially as it relates to EV infrastructure such as public charging stations.
President Biden has endorsed this movement, and has earmarked $174 billion for EV related issues in his proposed American Jobs Plan.
A Big Bet
General Motors appears to be all in on electric vehicles regardless of the infrastructure issues. The automaker has big plans already laid out for the next few years, involving a ton of new products. The automaker has previously noted that they want to roll out 30 new EVs before 2025, before offering only electric passenger vehicles in 2035. Furthermore, the automaker would like to be carbon neutral by 2040, but they’ve also admitted this is more of a goal than a guarantee. That seems to be a common theme in the world of electric vehicles, as companies try to quickly meet regulatory and cultural demands.
With this latest announcement, GM and Ford are now combining to spend over $65 billion on electric vehicle development before the middle of the decade. That sort of financial behavior alone should hint as to what is taking place across the industry, as tighter emissions regulations push automakers away from internal combustion engines. Whether or not this is the right move has yet to be seen, but it is becoming clearer every week that this is a move the company’s have to take.
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