DETROIT – General Motors will increase spending on electric and autonomous vehicles and add two battery factories in the United States, as it is betting consumers will eagerly switch from gasoline to new technology.
Wednesday’s announcements came as Ford, its crosstown rival, said its entire lineup of Lincoln luxury brands will be electric or gas-electric hybrid by 2030, including four fully electric vehicles.
For months, automakers outdid themselves with announcements of electric vehicles, which fueled the rise in share prices of both companies.
GM has not given details on where it will build the new plants, but CFO Paul Jacobson said they would be similar in size to two plants currently under construction in Lordstown, Ohio, and Spring Hill, Tenn . These factories will each employ more than 1,000 people and cost approximately $ 2.3 billion.
The new factories were due to arrive later in the decade, but have now been brought forward and are expected to be operational around 2025. They are part of GM’s plan to spend $ 35 billion on electric and autonomous vehicles from 2020 to 25. The company has also announced that it would switch more of the capacity of the U.S. assembly plant to electric vehicles, but gave no details on Wednesday.
The Associated Press reported Monday that GM will announce new battery factories this week.
GM previously announced that it would spend $ 27 billion on the development of electric and autonomous vehicles by 2025 as it rolls out 30 new electric vehicles around the world. Jacobson said the company will increase the number of electric vehicles but gave no details.
Electric vehicles accounted for less than 2% of vehicle sales in the United States last year, mostly in luxury brands. But industry analysts predict strong growth later in the decade as electric vehicles move beyond tech-savvy early adopters.
Jacobson said GM is having success with its new version of its Chevrolet Bolt hatchback and a new Bolt small SUV, giving it confidence that electric vehicle adoption is reaching an inflection point. “The Bolts have done well for us,” he said. “It really is no regrets capital. We know we are going to need these battery factories to achieve our goals.”
Wedbush analyst Daniel Ives said GM and Ford continually try to outdo each other with electric vehicle announcements. “This is an electric vehicle arms race going on in Detroit with Ford and GM competing for market and share of mind in this green tidal wave,” Ives said in an e- mail.
The two automakers, he said, are competing for what is expected to be a $ 5,000 billion market over the next decade. GM came out earlier than Ford, but Dearborn, Mich.-Based Ford is trying to “catch up and not be seen as the little brother,” he said.
“We see the electric vehicle as the biggest transformation in the auto industry since the 1950s, and it is in a major way shaking the automotive pillars of Detroit as they go after Tesla,” Ives said.
Also on Wednesday, GM raised its forecast for pre-tax profits for the first half of the year from $ 5.5 billion to between $ 8.5 billion and $ 9.5 billion, with net income of $ 6.2 billion to $ 7 billion.
In a conference call with reporters, Jacobson said the increase comes as GM continues to see strong demand for its vehicles, and because it has been able to mitigate production losses due to a global shortage of computer chips. He said the company was able to advance some chip shipments to the third quarter and remains cautious over the full year.
GM has also announced other deals to sell its battery and hydrogen technology to other companies. GM has announced that it will build two electric vehicles for the electric vehicle and hydrogen partner Honda, and that it will supply hydrogen fuel cells for Liebherr Aerospace. Previously, the company said it would supply batteries and fuel cell technology to Pittsburgh-based locomotive maker Wabtec and supply fuel cells to heavy-duty truck maker Navistar.
Ford said on Wednesday that the Lincoln brand’s first all-electric vehicle would go on sale next year, but gave no details. The company said that by mid-decade it expects half of Lincoln’s global sales to be zero-emission vehicles.
GM also said chief executive Mary Barra was in Washington to meet with lawmakers and President Joe Biden’s administration on federal pollution and fuel economy standards.
Biden is reversing former President Donald Trump’s lower pollution limits and plans to announce stricter standards in July.
On CNBC Wednesday, Barra said she was optimistic lawmakers would expand tax credits to jump-start electric vehicle purchases. Currently, there is a federal credit of $ 7,500 for electric vehicle buyers, and there are proposals to extend it up to $ 12,500. But as soon as a manufacturer sells 200,000 electric vehicles, the tax credit gradually disappears. GM and Tesla have hit the cap and can no longer offer the credit.
“We really believe that being a trailblazer shouldn’t be something that’s penalized when we look at the adoption of electric vehicles,” said Barra. “We are moving forward with a full portfolio, but we believe that leveling the playing field, that everyone has the same opportunity is going to be important.”