Business|G.M. will increase investment in electric vehicles by 30 percent and build more battery plants.
- June 16, 2021, 9:00 a.m. ET
General Motors is accelerating its plans to produce electric vehicles, the latest sign that automakers are engaged in a competitive race to transform themselves and embrace the electrification of cars and trucks.
The automaker said on Wednesday that it planned to build two more battery plants in the United States over the next several years, in addition to two battery factories it is already building in Ohio and Tennessee.
The company said it planned to spend $35 billion on E.V.s in the five years ending in 2025. That’s the second increase in the last eight months. A year ago, G.M. said it would spend $20 billion in that period, and in November increased the figure to $27 billion.
“E.V. adoption is increasing and reaching an inflection point, and we want to be ready to produce the capacity that we need to meet demand over time,” G.M.’s chief financial officer, Paul Jacobson, said in a conference call with reporters. “We know we’ll need those battery plants to further out goals.”
At the same time, G.M. also said it expected operating profit in the first half of the year to be $8.5 billion to $9 billion, a significant improvement over an earlier forecast. The company credited improved supplies of computer chips, better-than-expected earnings from its financing arm and strong overall demand and pricing for new vehicles. G.M. had previously expected a steep drop in second quarter operating profit because of the global semiconductor shortage.
G.M.’s push to increase E.V. spending follows an announcement by Ford Motor that it would start making an electric version of its F-150 pickup truck later this year. Ford recently said it expected to spend $30 billion on electric cars and trucks from 2020 to 2025.
Ford has already started selling an electric sport-utility vehicle, the Mustang Mach E. Volkswagen has a similar model, the ID.4, that is now in dealerships. Tesla is leading the shift to electric vehicles and is expected to sell about 800,000 cars globally this year.
G.M. this year introduced an updated version of its electric car, the Chevrolet Bolt, that can travel farther on a full charge and has added to roomier version of the same car. A battery-powered GMC Hummer pickup truck is set to go into production late this year and is supposed to be followed by more than 20 electric models over the next four years.
The company did not say where it planned to locate the two additional battery plants. It is building the battery plants in a joint venture with the Korean manufacturer LG Chem.
As part of its announcement on Wednesday, G.M. said it had reached an agreement with Honda Motor to make an electric S.U.V. for the Japanese company’s Honda brand and another for its luxury Acura line.
G.M. has set a goal of selling one million E.V.s a year by 2025. It also hopes to produce only electric cars and trucks by 2035.