General Motors will invest $4 billion over the next two years to expand its manufacturing capacity for internal combustion engine (ICE) vehicles, signaling a shift in focus amid slower-than-expected growth in the electric vehicle (EV) market.
The investment will allow GM to build more than 2 million vehicles annually in the United States, the company said in a press release. The move responds to “continued strong demand” for full-size SUVs and light-duty pickup trucks.
This expansion appears to mark a step back from GM’s previously stated goal to sell only light-duty EVs by 2035. In 2023, CEO Mary Barra reaffirmed that target but acknowledged the company would adapt based on customer demand.
Commenting on the new investment, Barra said, “We believe the future of transportation will be driven by American innovation and manufacturing expertise. 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 long supported the transition to electric vehicles. However, despite rising EV sales and federal incentives under the Biden administration, the company has struggled with profitability in the EV segment. In 2023, GM projected its EV losses would reach $5 billion for the year after posting $3.7 billion in losses over the first nine months.
In January 2024, GM announced that its electric vehicles had become “variable profit positive.” Still, the recent decision to expand ICE production suggests that modest EV profits have not yet justified scaling back traditional vehicle manufacturing.
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