• GM Plans $2.2 Billion Investment to Build Electric Trucks, SUVs

  • GM Plans $2.2 Billion Investment to Build Electric Trucks, SUVs

    General Motors on Monday said it would spend $2.2 billion to convert a Michigan
    assembly plant to produce all-electric trucks, SUVs and self-driving vehicles.

    In an announcement about the plan, the automaker said its "vision of an
    all-electric future is coming into clearer focus and gaining momentum" with the

    The project paves the way for the release of GM's first all-electric truck,
    which is scheduled to begin production in late 2021, the company said. This
    will be soon followed by production of the Cruise Origin, a shared, electric,
    self-driving vehicle unveiled by the company's Cruise division last week.

    The work will be done at GM's Detroit-Hamtramck assembly plant, which currently
    employs about 900 people building the Cadillac CT6 and the Chevrolet Impala,
    the company said.

    The company said that with the investment, the plant when fully operational
    will create more than 2,200 manufacturing jobs and be the company's first fully
    dedicated electric vehicle assembly plant.

    GM said it will also invest an additional $800 million in supplier tooling and
    other projects related to the launch of the new electric trucks.

    "Through this investment, GM is taking a big step forward in making our vision
    of an all-electric future a reality," said company President Mark Reuss, who
    added GM is planning to build multiple electric truck variants at the plant in
    coming years.

    The GM announcement is just the latest in a series of recent high-profile steps
    by major auto makers to increase production of electric cars and trucks.

    In March 2019, Ford announced it was investing $850 million to prepare the Flat
    Rock Assembly plant in southeast Michigan for EV production. The company, which
    plans to invest more than $11 billion globally toward development and
    production of electric vehicles, in November unveiled its electric Mustang SUV
    and has announced plans for an electric F-150 pickup truck.

    The Volkswagen Group in November said it planned to spend nearly 60 billion
    euros over the next five years on hybridization, electric mobility and
    digitalization, including the introduction of 75 all-electric models and
    about60 hybrid models through 2029. VW originally had a goal of producing 1
    million EVs by 2025, but in December upped that target to 1.5 million due to
    strong EV sales.

    Meanwhile, the Boston Consulting Group reported earlier this month that global
    sales of electrified vehicles are growing even faster than expected. The group
    projects that all types of EVs will control a third of the market by 2025 and
    51% by 2030, with battery-powered electric vehicles and plug-in hybrids making
    up about half those sales, for a quarter of the market.

    Boston Consulting said a combination of government incentives, increasing
    emission regulation that are forcing companies to build more EVs to meet
    targets, falling battery prices and increased range are all contributing to the
    acceleration in EV sales.

    Not all market watchers are so optimistic about the future uptake of EVs. In a
    December report, the Massachusetts Institute of Technology warned against
    optimistic expectations about falling battery prices. MIT's Energy Initiative
    predicted that EV purchase prices a decade from now will still command a $5,000
    cost premium over ICE vehicles due to the cost of manufacturing batteries.

    --Reporting by Steve Cronin, scronin@ihsmarkit.com

    --Editing by Michael Kelly, michael.kelly3@ihsmarkit.com

    Copyright, Oil Price Information Service

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