GM increases electric, autonomous spending to $35 billion through 2025
Detroit — General Motors Co. is increasing its electric and autonomous investment by 30% through 2025 to $35 billion, the company said Wednesday.
The announcement marked the second time in less than a year that the Detroit automaker has increased EV and AV spending. The first was last November when GM increased spending from $20 billion to $27 billion.
GM also said Wednesday it's moving up construction to mid-decade for two new U.S. Ultium battery cell plants in addition to two other battery cell plants it's already building in Ohio and Tennessee. Locations for the new plants weren't revealed.
The investment increase news from GM comes after rival Ford Motor Co. said in May it would spend $30 billion on EVs through 2025. While GM doesn't break down how much of the $35 billion will be spent on EVs, this is the first year the automaker is spending more — $7 billion — on EVs than on gas and diesel programs.
“We are investing aggressively in a comprehensive and highly-integrated plan to make sure that GM leads in all aspects of the transformation to a more sustainable future,” GM Chair and CEO Mary Barra said in a statement. “GM is targeting annual global EV sales of more than 1 million by 2025, and we are increasing our investment to scale faster because we see momentum building in the United States for electrification, along with customer demand for our product portfolio.”
The automaker still plans to introduce 30 EVs globally by 2025 with two-thirds available in North America. With the additional investment, GM is now adding new electric commercial trucks and other products to its North America plan. It's also planning to add additional U.S. assembly capacity for electric SUVs. More details will be announced later, GM said Wednesday.
Beyond EVs, GM is also moving forward on its Hydrotec hydrogen fuel cell technology. GM confirmed the launch by mid-decade of its third-generation fuel cells that it says will have greater power density and lower costs.
On Tuesday, the automaker revealed a partnership with transportation solutions provider Wabtec Corp. that will expand the use of GM's Ultium batteries and Hydrotec hydrogen fuel cell systems to locomotives.
On the AV side, Cruise, GM’s majority-owned self-driving subsidiary, recently received permission from regulators in California to provide a driverless AV passenger service to the public. On Tuesday, Cruise said it's getting a $5 billion line of credit from GM Financial to scale its autonomous Cruise Origin fleet, which will be manufactured at GM's Factory Zero Detroit-Hamtramck Assembly Center starting in 2023.
GM's increase in EV and AV investment is possible because of its "strong underlying business," the automaker said in a release.
The automaker is increasing its previous first half of the year guidance from $5.5 billion to between $8.5 and $9.5 billion in pre-tax profits "due to continued strong demand, better-than-expected results at GM Financial, and improved near-term production from the pull forward of semiconductors from the third quarter."
In early June, GM said it would ship about 30,000 Chevrolet Colorado and GMC Canyon mid-size pickups from mid-May through the week of July 5. These trucks have been held at the plant awaiting parts due to the global chip shortage affecting all automakers.
"We had the opportunity, as we mentioned a couple of weeks ago, to pull forward some semiconductors from the third quarter, giving us more time to solve those problems and putting more vehicles out for sale," GM CFO Paul Jacobson said on a call with media Wednesday. "That really strong result is evident in what we're producing, and we're very excited to do that. We remain cautious about the full year."