General Motors Considering $4 Billion Plus Investment in Two Michigan Plants to Boost its EV Production Capacity

author: FutureCar Staff    

As part of GM's planned investments, its Orion assembly plant in Michigan will be retooled to produce EVs in a $2 billion overhaul project.

General Motors continues to put the pieces in place to start building electric vehicles at scale, with massive investments in software, autonomous driving, battery production and the development of new electric models.

Now Reuters reported on Friday that GM is looking to invest more than $4 billion in two Michigan plants to boost its electric vehicle production capacity, according to sources and new documents the automaker made public.

The details of GMs latest investment plans were first reported by the Wall Street Journal.

GM's latest plans include building a $1.5 billion EV battery plant near Lansing, Michigan with its partner LG Energy Solutions, while GM's Orion assembly plant will be retooled to produce electric vehicles in a $2 billion overhaul project, a person familiar with the matter said.

The total investments could top $4 billion, a source familiar with the plan told Reuters. 

Documents posted by the city of Lansing, Michigan show GM is considering building a battery cell manufacturing plant in nearby Delta Township that could employ up to 1,700 workers by 2028. The Lansing City Council is expected to consider the proposal on Monday, according to Reuters.

The joint venture battery plant would be roughly 2.5 million square feet and built on land currently owned by GM, the documents say, adding that "the battery cell production facility will generate significant economic activity throughout Michigan."

Michigan state lawmakers are moving for quick approval of the plans to boost the state's ability to win new electric vehicle and battery plant investments. If approved, GM's share of the total investment in the two Michigan EV projects would be at least $3 billion.

The Orion plant currently builds the Chevrolet Bolt EV, although production was temporarily halted until late January as GM deals with a massive battery recall of the Bolt due to fire risks.  The Orion plant would be converted to build other vehicles on GM's Ultium EV platform, the source said.

Speaking at an Automotive Press Association event in Detroit on Thursday, GM Chief Executive Mary Barra told members of the media that a final decision on new plants in Michigan and elsewhere could be just "weeks away."

However GM said in a statement on Friday that it was "developing business cases for potential future investments in Michigan," but that "these projects are not approved and securing all available incentives will be critical for any business case to continue moving forward."

GM announced in June that its increasing its investments in electrification and autonomous driving technologies to $35 billion through 2025 as it plans for an all-electric future with dozens of new battery-powered models in the works, many with autonomous driving capabilities.

GM's massive investment includes battery production in the U.S. In April, Ultium Cells LLC, the joint venture of LG Energy Solution and GM, announced a $2.3 billion plus investment to build a second EV battery cell manufacturing plant in Spring Hill, Tennessee.

Ultium Cells will build the EV battery plant on land leased from GM. The automaker owns over 2,000 acres of land surrounding the plant. The factory is scheduled to open in late 2023.

The Tennessee battery plant will support GM's future EVs that will be built in Tennessee. The automaker announced in Oct 2020 that it will invest $2 billion in its Spring Hill Manufacturing facility to build fully-electric vehicles, including the upcoming Cadillac LYRIQ crossover, the first electric vehicle from GM's luxury division. The LYRIQ will be the first EV produced in Spring Hill.

GM's other battery plant is in Ohio near the automaker's former Lordstown assembly factory. GM and LG are also investing up to $2.3 billion in the Ohio facility. The total investments in the two factories is $4.6 billion.

Last week, GM announced plans to form a new joint venture with South Korean battery materials company POSCO Chemical to construct a factory in North America to process battery materials for GM's Ultium electric vehicle platform, which will underpin future models from the automaker.

The joint venture will process what's called "Cathode Active Material" or CAM, which is a key battery material. CAM represents about 40 percent of the cost of a battery cell, according to GM. GM and POSCO Chemical have already signed a non-binding term sheet to create the joint venture and expect to execute definitive agreements shortly.

On Thursday, GM announced a new partnership with German company Vacuumschmelze (VAC) to build a plant in the United States that will manufacture permanent magnets for the electric motors in GM's future electric vehicles. 

The permanent magnets will be used in the GMC HUMMER EV, Cadillac LYRIQ, Chevrolet Silverado E and more than a dozen other electric models in development that will be built on GM's Ultium EV Platform. 

The new plant would also use locally sourced raw materials, GM said. The finished magnets will be delivered to facilities building EV motors for GM's Ultium-powered EVs.

The factory is expected to begin production by 2024.

With its bold plans, GM aims to eventually overtake Tesla in EV sales. The automaker wants to double its annual revenues by 2030 by improving its EBIT adjusted margins as its transitions to its electric future.

Shares in GM were up 6% to $63.21 on Friday after the automaker's plans were made public.

FutureCar Staff