California-based electric vehicle (“EV”) maker Tesla (NASDAQ: TSLA) will soon be facing major competition from General Motors (NYSE: GM) after the automaker announced that it would invest billions of dollars into building an electric vehicle and battery manufacturing plant in Michigan, the state it calls home. General Motors wants to invest $6.6 billion by 2024 to speed up the development of electrified pickup trucks as well as install a new plant to build EV battery cells for its electric cars. According to the automaker, the investment is just part of the company’s plan to step up its production capacity in North America to a million EVs by 2025.
This will propel GM Motors well past Tesla, which has dominated the nascent EV market since it launched the Tesla Roadster more than a decade ago. GM plans on spending $35 billion on developing its electric vehicle lines through 2025 and projects that it will surpass Tesla and become the number-one, U.S.-based EV maker by mid-decade.
CEO Mary Barra said in a statement that the automaker has the EVs, EV battery cell production capacity, as well as assembly capacity to take up the position of “EV leader by mid-decade.” Despite these lofty plans and GM’s massive investment in zero-emission electric cars, the company has plenty of work to do before it catches up to Tesla.
Last year, Tesla sold 936,172 electric vehicles worldwide while General Motors didn’t reach the 25,000 electric cars mark through its Chevrolet brand. The Detroit, Michigan-based company ranked third behind Ford, a competitor that sold 27,140 Mustang Mach-E EVs. Now that Tesla’s production plant in Texas is now online, LMC Automotive, a sector forecaster, expects Tesla’s production capacity in North America to jump from approximately 580,000 to nearly a million units by the end of the year. However, General Motors’ gargantuan investment in EVs may propel the automaker past Tesla.
GM will spend $2.6 billion on a new manufacturing plant for batteries in Lansing, Michigan, through a partnership with South Korea’s LG Chem. Another $4 billion will go toward retrofitting the Detroit-based Orion Assembly to produce GM’s upcoming electric trucks, including the electrified Chevrolet Silverado and the GMC Sierra. General Motors will also invest an additional $510m in two assembly plants for upgrading non-electric cars in Lansing. The entire $6 billion investment is projected to retain 1,000 workers and create 4,000 new job opportunities.
General Motors expects to open the 2.8 million-square-foot battery plant in Lansing with LG in late 2024. Including facilities in Lordstown, Ohio and Tennesse, this is the third battery facility GM will build on American soil. All three battery plants will be built by Ultium Cells LLC, GM’s joint venture with LG.
This aggressive expansion planned by GM raises the stakes for other manufacturers that will have to compete for market share with these legacy automakers having deep pockets.
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