Over the past four years, General Motors has garnered a lot of headlines for its announcements around plans to shift from internal combustion to battery electric vehicles including plans for $35 billion of investment in products and manufacturing. So far that hasn’t actually amounted to much product hitting the street with GM selling fewer than 25,000 EVs in the US in 2021 and just 26 units in the fourth quarter. GM has now announced $7 billion of investments in Michigan that will build toward a goal of 1 million units of EV production capacity in North America by the end of 2025.
Today’s announcement included $4 billion to retool the Orion, Michigan assembly to produce up to 360,000 electric pickup trucks starting in 2024. This will be in addition to the 270,000 units of capacity at the Detroit-Hamtramck assembly plant known as Factory Zero. The Detroit plant is building the GMC Hummer EV, Cruise Origin, Chevrolet Silverado EV and GMC Sierra EV. Orion is planned to focus on the Silverado and Sierra.
Combined the two plants are planned to produce about 600,000 Silverados and Sierras annually. In 2020, the four assembly plants producing light and heavy duty pickups in Oshawa, Ontario, Fort Wayne, Indiana, Flint, Michigan and Silao Mexico produced about 850,000 units so as the EVs ramp up, some of those will likely have to shift to other products.
During a conference, GM President Mark Reuss highlighted that the company is utilizing existing facilities for the conversion rather than building greenfield sites which will save GM time and money. However, $4 billion to retool an existing plant, points to essentially an all-new factory anyway. Like the Detroit plant, Orion will likely be gutted back to the bare walls with all of the existing assembly transfer lines scrapped and replaced by a flexible system of automated guided vehicles. The plant will likely get an all-new body and paint shop as well as a battery pack assembly line. In addition to the 1,000 people currently working at Orion, GM plans to add 2,350 new jobs there.
While GM is mostly reworking existing assembly facilities for EV production, cell manufacturing is going into brand new factories. Another $2.6 billion of investment, split between GM and LG Energy Systems, will be spent on the third of four planned factories for the Ultium Cells LLC joint-venture. This plant will be located near Lansing, Michigan, about 90 minutes from both Orion and Detroit. This plant is expected to have a capacity of 50 GWh worth of cells annually, a significant bump from the 35 GWh capacity of the first two plants in Lordstown, Ohio and Spring Hill, Tennessee. That should be enough to support about 400,000 to 500,000 vehicles per year. After production starts in Lansing in late 2024, that plant should have about 1,700 employees.
In addition to the two EV related plants, GM is also spending about $510 million on upgrades to the Delta Township and Grand River assembly plants in Lansing for upgrades for future products. Those plants are not yet slated for EV production, but that transition will likely happen toward the end of the decade.
2022 should finally start to see GM’s EV numbers begin to ramp up with the launch of the Cadillac Lyriq this spring, growing production of the Hummer and resumption of Bolt production, possibly as soon as late February. However, the second half of 2023 and into 2024 should bring the real step change with the launch of the Silverado, Sierra and Equinox EVs.
One question that has not been answered yet is whether GM will be able to get the battery material supply chain to keep pace with the expected production volumes. GM has made a number of recent announcements about partnerships and investments in lithium and rare earth material production in the US. But currently virtually all of those materials are imported, with most of it processed in China. GM now has 3 cell plants announced with 120 GWh of capacity and LG, SK Innovation, Ford, Stellantis and others planning even more in the next several years. It remains to be seen where all of the lithium, nickel, cobalt, manganese and other materials will come from.
