General Motors will be investing $4 billion in new manufacturing capacity for internal combustion engine vehicles, signaling cooling interest in electric cars. The investment will be spread over two years.
“The new investment will give GM the ability to assemble more than two million vehicles per year in the U.S.,” the company said in its news release, saying the investment move is a response to “continued strong demand” for full-size SUVs and light-duty pickup trucks.
The decision to expand ICE vehicle manufacturing seems like a departure from plans to become an all-EV maker, which GM had earlier said it wants to do by 2035. “Our plan is to only be selling EVs, light-duty EVs at that time but of course we’re going to be responsive to where the customer is at but we have a plan to do that,” CEO Mary Barra said in 2023.
Now, commenting on the news of the factory expansion, Barra said that “We believe the future of transportation will be driven by American innovation and manufacturing expertise,” adding that “Today’s announcement demonstrates our ongoing commitment to build vehicles in the U.S and to support American jobs. We’re focused on giving customers choice and offering a broad range of vehicles they love.”
GM has been on board with the electrification of transport but it has been losing money on its EVs, despite rising sales during the Biden administration, which offered substantial incentives to both carmakers and EV buyers. Last year, EV losses at the Big Auto major were expected to hit $5 billion after a loss of $3.7 billion booked for the first nine months of the year. Instead, GM announced in January that EVs had become “variable profit positive”. It seems, however, that this variable profit positivity is not enough to motivate shrinking ICE car manufacturing.
By Irina Slav for Oilprice.com
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