General Motors to Give $2 Billion to Increase US Electric Vehicle Production

By Elijah Labby Thursday, October 22, 2020

On Tuesday, General Motors Company (GM) announced that it would allocate over $2 billion to domestic electric vehicle (EV) manufacturing.

The investment is part of a larger push by the company to move toward electric vehicle production. Since 2019, GM has committed nearly $5 billion to the effort, citing an industry-wide move to electric vehicles in the future.

“We are committed to investing in the US, our employees, and our communities,” said GM CEO Mary Barra in a statement. “These investments underscore the success of our vehicles today, and our vision of an all-electric future.”

The $2 billion will largely go to a manufacturing plant in Spring Hill, Tennessee, where the company says renovations will begin immediately.

A company spokeswoman said that GM is committed to US-based manufacturing and that the announcement was unrelated to the upcoming elections.

“The timing of the announcement [is] based on the production schedule and need to begin preparing the facilities,” the representative said in an email. “General Motors is committed to manufacturing in the United States, we are proud of the vehicles we build and the people who build them.”

GM’s New Electric Vehicles

The plant will produce the Cadillac Lyriq, an electric crossover the company unveiled in August. The vehicle, said Marty Hogan, chief engineer for the Lyriq, will boast a range of over 300 miles and have a 19-kW, Level 2 charging option. The car will likely be available in late 2022.

GM also unveiled the GMC Hummer EV, which the company calls the "ultimate off-road EV supertruck."

The company is selling the all-new Hummer in four tiers of various features, the highest (and most expensive, at over $110,000) of which can drive up to 350 miles on a single charge, with 0-60 speeds of about three seconds.

While reservations for the Hummer’s highest tier are full, it is unclear how consumers will respond to the machine when it is fully on the market. Regardless, Ivan Drury, the senior manager of the automotive information website, said the vehicle’s release will help consumers see that large, formerly-gas-powered vehicles like the Hummer can be functional when fully electric and "help push consumer acceptance of EVs into a new realm."

The Current Electric Vehicle Market

However, Drury said the electric vehicle market is still foreign to most consumers, and the Hummer and Lyriq’s release may prove controversial or confusing to the layman.

"Options and considerations will be different from what consumers might be accustomed to when shopping for a traditional truck, some of the stylings can be highly polarizing, and real-world functionality has yet to be proven," he said.

The move also represents a willingness on the part of GM to move into a less lucrative segment of the automotive market. Valued in 2019 at just over $162 billion, the electric vehicles market is still a growing niche of the full automotive vehicles market, which was valued at $5 trillion in 2017.

Both the electric vehicle market and its parent market are expected to grow in the coming years, with analysts predicting the global automotive industry’s annual growth rate will reach about 13 % and the EV’s about 22%.

GM is just one of many companies making a push for the burgeoning market. Companies like Hyundai, Kia, Jaguar, Mercedes-Benz, and industry mainstays Tesla and Rivian (from whom Amazon purchased 10,000 delivery trucks) have all attempted to seize market share.

However, some experts believe that widespread adoption will take time.

“It will be a long, long time until we see mass adoption,” said Joe Eberhardt of Jaguar Land Rover. “...Nobody is going to drive them into the ocean.”

Global auto manufacturers like Audi and Volkswagen have cited growing environmental concerns and increasing international emissions regulations as motivators to move into the industry — a turnaround for the companies, who were caught manipulating emissions monitoring equipment inside their vehicles in 2015.

The controversial incident forced the companies to fire several top executives, including the then-CEO, pay billions in fines, and commit to adding three new electric vehicles this year.

Upon the 2020 announcement of Volkswagen’s ID.4 SUV, Ralf Brandstätter, Chief Operating Officer of Volkswagen, said the car was an attempt to decrease automotive contributions to climate change.

“Climate change is happening, and it’s time to do something about it,” he said. “That’s where e-mobility comes in, and Volkswagen is pushing the pace of e-mobility for everyone.”

About the Author

Headshot for author Elijah Labby

Elijah Labby is a graduate of the National Journalism Center. He has previously written for Broadband Breakfast, a technology and internet policy website.

Related Articles