GM announces $7 billion investment in Michigan in electric vehicle battle

Jan 25, Reuters -- General Motors Co GM.N said Tuesday it will invest $7 billion in Michigan, much of it aimed at dramatically boosting the production of full-size electric pickups, a battle with rival Ford Motor Co F.N for EV supremacy in North America.

Both the US automakers and Tesla will have to contend with the current leader, Tesla TSLA.O, which will soon open a second U.S. plant in Austin, Texas, which is on pace to sell more than 1 million electric vehicles globally in the year 2022.

Three other plants in Tennessee, Ontario and Mexico boosted the company's total North America EV production capacity to more than a million units by late 2025, with the Detroit-Hamtramck and Orion Township plants being able to build more than 600,000 electric trucks a year.

In January, Ford said it would have the annual capacity to build 600,000 electric vehicles, including 150,000 F-150 Lightning pickups, within 24 months, when it aims to become the clear No. In the last year, Ford said it would invest more than $11 billion in new electric truck and battery plants in Tennessee and Kentucky, along with Korean partner SK Innovation 096770. GM Chief Executive Mary Barra said at a press conference Tuesday that Detroit-based GM is committed to making our home state the epicenter of the electric vehicle industry. GM's investment includes $2.6 billion with Korean partner LG Energy Solution 051910. When it opens in late 2024, KS will supply Orion Township and other GM assembly plants with a new battery cell plant in Lansing.

The United Auto Workers' leaders applauded the Michigan investments and said the union is ready to welcome new members at the GM-LG battery plant and sister facilities in Ohio and Tennessee.

Reuters previously reported on the details of the new investment in Michigan.

More than $500 million in two Lansing plants that currently build combustion-engine vehicles are among the incentives provided by Michigan to secure the GM investments, according to Reuss. Michigan officials said the state contributed $824 million in incentives in part to support 4,000 new GM jobs.

Reuss didn't say how much longer GM plans to build the Chevrolet Bolt EV and Bolt EUV at Orion. The press release from GM said the production of the two electric vehicles will continue during the plant's conversion. The Lansing battery cell plant is the third U.S. plant built by Ultium Cells, the joint venture GM-LG, which is also building similar facilities in Lordstown, Ohio, and Spring Hill. A fourth North American battery plant is planned.

In June of last year, GM said it would boost electric and autonomous vehicle spending to $35 billion by the year 2025, a 30% increase over its previous forecast.

Michigan Governor Gretchen Whitmer said she is proposing a $2,500 rebate for the purchase of an electric vehicle and charging equipment. GM and Tesla have exceeded the threshold for qualifying for a federal EV tax credit of $7,500, but Congress is considering lifting the cap and expanding federal credits for up to $12,500.