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GM to spend $7b on Michigan plants to further its electric vehicle aims

General Motors CEO Mary Barra announced the $7 billion investment in electric vehicle and battery production in Michigan on Tuesday. The investment will be used at four facilities in Michigan and will create 4,000 jobs.Bill Pugliano/Getty

General Motors said Tuesday that it would spend $7 billion to build a battery plant in Michigan and overhaul an existing factory outside Detroit to begin producing electric pickup trucks by 2024.

The investment will create 4,000 jobs and significantly increase GM’s capacity to build electric vehicles in the United States, the company said.

“We want to have a good manufacturing base in the Midwest,” GM’s president, Mark Reuss, said in a conference call with reporters. “Three years ago, we looked at all the EV potential and began to plan our footprint.”

The state of Michigan is providing GM with $824 million in economic incentives.

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The investment plan is the latest by the auto industry to ramp up production of electric vehicles. In December, Toyota said it planned to build a battery plant in North Carolina that is expected to employ 1,750 people.

Ford Motor has already overhauled a plant in Dearborn, Mich., and is set to begin making an electric version of its F-150 pickup this spring. Ford also plans to spend $11.4 billion to build two battery plants in Kentucky and a third battery plant and an electric-truck plant in Tennessee.

GM has battery plants under construction in Ohio and Tennessee, and has retooled a plant in Detroit, where it recently started making an electric Hummer truck. It also plans to make electric vehicles at a plant in Ontario and at another in Mexico.

All told, GM expects to have the manufacturing capacity to make 600,000 electric vehicles a year by 2025, Reuss said.

GM has said it aims to phase out production of gasoline-powered vehicles by 2035, but so far, Ford is ahead of GM in EV sales. Ford has been selling an electric SUV, the Mustang Mach E, for more than a year, and has taken in more than 200,000 reservations for the electric F-150 Lightning.

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Ford developed those models by using battery packs developed by a supplier. GM decided to take extra time to develop its own modular battery packs that it believes will provide a cost advantage over competitors in the long run.

GM’s new Michigan battery plant, like GM’s other battery plants, will be a joint venture between the automaker and LG Electric. It will be built on the site of an existing plant in Lansing, at a cost of $2.6 billion to be shared between GM and LG.

GM will also invest $4 billion to enable a plant in Orion Township, Mich., to make electric versions of its Chevrolet Silverado and GMC Sierra pickups. The company expects to add 2,350 jobs at the Orion factory and to retain 1,000 other jobs at the plant when pickup production starts.

The plant has been making the Chevrolet Bolt, an electric compact car, although production has been halted for several months because of a recall that requires GM and LG to replace the battery packs in all Bolts made since 2017.

Reuss declined to say whether GM would continue to produce the Bolt as it prepared the Orion plant to make pickups.

GM also said it would spend $510 million to upgrade two vehicle plants in Lansing.