A battle between two very different types of auto industry giants is brewing over who will rule the electric vehicle market, as General Motors pours billions of dollars into its EV business with the aim of taking on market leader Tesla.
GM, whose history dates to the earliest days of motorized transportation, recently announced plans to spend nearly $7 billion to convert one of its Michigan factories into an electric pickup truck plant and also build a new battery cell facility. The dollar figure represents the Detroit-based automaker’s biggest-ever investment in its home state.
The huge outlay of money is part of an overall plan to increase GM’s North American production capacity enough to build 1 million electric vehicles by 2025.
The company has pledged to spend $35 billion on EVs by the same year, with a target of producing 30 different EV models.
GM officials are not shy about their ultimate goal: to overtake Tesla, which was founded less than 20 years ago but is now the world’s biggest EV manufacturer by a wide margin. According to GM’s own projections, it will surpass Tesla as the top U.S.-based seller of electric vehicles by the middle of the decade.
That’s an ambitious goal, considering that Tesla controls roughly two-thirds of the EV market in the United States, according to a November article on the Green Car Reports website that cited Experian data.
Tesla delivered more than 936,000 EVs globally in 2021, CNBC reported. In contrast, GM’s Chevrolet brand sold less than 25,000 EVs last year, placing it third in the U.S. behind Tesla and Ford. Tesla’s production will increase dramatically when its new Texas plant goes online. According to industry researcher LMC Automotive, that should push the company’s U.S. production capacity to about one million units from its current capacity of 580,000.
To close the gap, GM will spend up to $4 billion converting and expanding its Orion Township assembly factory so it can produce electric pickups. The company will spend up to $2.5 billion more to build a third U.S. battery cell plant in Lansing. That facility will be owned by Ultium LLC, a battery cell venture jointly owned by GM and its partner, South Korea-based LG Energy Solution.
GM will also get an infusion of cash from Michigan’s economic development board, which approved $824 million in incentives and assistance for the company. The projects are expected to add a total of 4,000 new jobs.
“[Michigan} recognized how important it is to grow the employment base, the R&D capabilities, and the manufacturing sector here,” GM President Mark Reuss told a gathering of reporters in January. “It’s not one thing. It’s really everything.”
Both of the new plants should begin turning out products in about two years, allowing GM to initially build 600,000 electric pickup trucks as it moves toward its goal of 1 million EVs by 2025. The company’s “Factory Zero” plant in Detroit began producing the Hummer electric pickup last year, with plans to also make the Chevrolet Silverado-E. GM’s Orion Township facility will make the electric Silverado as well, along with a battery-powered version of the GMC Sierra.
GM’s EV program is part of an overall company mission to “put every driver in an electric vehicle on a scale previously unseen,” and move the world closer to zero emissions. The program, which goes under the name of the Ultium Platform, aims to engineer EVs that will provide greater range and power, charge fast, and fit every type of vehicle.GM and other carmakers are under increasing pressure to ramp up the production of EVs to meet federal regulations designed to reduce carbon emissions. President Joe Biden signed an executive order last year that calls for the U.S. government to help ensure that EVs make up half of all vehicles sold in the U.S. by 2030.