General Motors announced a $340 million investment in two US manufacturing facilities to boost production of internal combustion engine (ICE) vehicles. The move comes as demand for electric vehicles (EVs) has significantly slowed nationwide.
Investment Details
The Romulus, Michigan, facility will receive $300 million, while the Toledo, Ohio, plant will get $40 million. Both plants produce critical components for ICE vehicles, including 10-speed transmissions and engine parts. GM has now invested a total of $6 billion in US manufacturing over the past year.
"We're able to give customers what they want with the increased capacity. At the same time, we'll continue to invest in our workforce," said Mike Trevorrow, GM's senior vice president of global manufacturing.
Shift in Strategy
The investment underscores GM's shift toward high-profit gas-powered vehicles, including full-size trucks, SUVs, and the Chevrolet Corvette. This pivot follows a sharp decline in EV sales, with GM reporting an 82% drop in Blazer EV sales and a 41% year-over-year decline in Silverado EV deliveries in the first quarter of 2024.
The US EV market has struggled since the federal government canceled the $7,500 tax credit for domestically produced EVs. GM has also incurred $2.2 billion in costs related to scaling back parts of its EV production strategy.
Commitment to EVs
Despite the slowdown, GM maintains it is not abandoning EV production entirely. "Our focus remains on improving EV profitability and scaling our business as market adoption grows, albeit at a slower expected pace than we had previously seen," stated CFO Paul Jacobson during GM’s recent earnings call.
The $340 million investment is part of a broader $830 million initiative across three facilities supporting gas-powered vehicle production.