GM invests billions in US production – with a renewed focus on petrol

General Motors has announced a $4 billion investment package aimed at increasing production across its US manufacturing sites over the next two years. While the plan includes electric vehicles, a major share of the funding is going towards expanding internal combustion engine (ICE) output. The move marks a notable recalibration of GM’s drivetrain strategy – balancing legacy technologies with its EV ambitions.

The investment primarily targets three key plants: Orion (Michigan), Fairfax (Kansas), and Spring Hill (Tennessee). Although GM has not released a detailed breakdown of the allocation, it outlines the planned production start-ups as follows:

• The Orion Assembly plant in Michigan will start producing petrol-powered SUVs and light pickups in early 2027. The original plan was to manufacture electric pickups there from 2026.
• The Fairfax Assembly plant in Kansas will begin production of the recently launched petrol-powered Chevrolet Equinox, which is currently only built in Mexico, in mid-2027. Fairfax will also kick off construction of the Chevrolet Bolt EV by the end of the year, and part of GM’s newly announced investment will go towards preparing the site for the construction of affordable next-generation electric cars.
• At the Spring Hill Manufacturing plant in Tennessee, GM will begin production of the Chevy Blazer combustion engine vehicle in 2027, which is currently also manufactured in Mexico. It will then be produced alongside the electric Cadillac Lyriq and Vistiq SUVs and the petrol-powered Cadillac XT5.

Nonetheless, the company continues to highlight the balanced nature of its approach: boosting the production of both ICE and electric vehicles. GM claims the investment will enable it to assemble over two million vehicles annually in the US – though a breakdown by powertrain was not provided.

The ICE ramp-up aligns with GM’s recent $888 million investment in its Tonawanda propulsion plant in New York, where it will build its next-generation V8 engines. While reaffirming its EV ambitions, the company appears to be hedging its bets in light of political and regulatory uncertainties.

“We believe the future of transportation will be driven by American innovation and manufacturing expertise,” said Mary Barra, Chair and CEO. “Today’s announcement demonstrates our ongoing commitment to build vehicles in the US and to support American jobs. We’re focused on giving customers choice and offering a broad range of vehicles they love.”

“Today’s news goes well beyond the investment numbers — this is about hardworking Americans making vehicles they are proud to build and that customers are proud to own,” added GM President Mark Reuss. “As you travel the country, you can see firsthand the scale of our manufacturing footprint and the positive economic impact on our communities and our country.

The political dimension is hard to ignore. According to Reuters, Barra met with then-President Donald Trump earlier this year to discuss investment plans – reportedly including requests for flexibility around California’s emissions mandates. Just yesterday, Trump signed legislation overturning those very state-level zero-emission regulations, prompting legal action from California and ten other US states.

The developments may cast doubt on GM’s previously stated goal to phase out ICE sales by 2035. Reuters also notes that the Trump administration has welcomed the new investment strategy, which supports the White House’s efforts to localise production through tariffs on vehicle imports.

Currently, both the Chevrolet Equinox and Blazer are built in Mexico. While Equinox production will remain there for non-North American markets, GM has not confirmed plans for the Blazer’s overseas output. There are no job cuts or plant closures planned in Mexico at this stage.

Meanwhile, GM continues to post rising EV sales in the US. In the first five months of 2024, GM sold 62,000 electric vehicles, securing the number two spot behind Tesla. Chevrolet has been the fastest-growing EV brand in Q1 and is now the second-largest EV brand in the country, with over 37,000 units sold through May – ahead of Ford’s 34,000.

GM’s capital expenditure forecast for 2025 remains unchanged at $10–11 billion. Looking ahead to 2027, annual investments are expected to range between $10 and $12 billion, “reflecting increased investment in the U.S., the prioritisation of key programs, and efficiency offsets.”

news.gm.com, reuters.com, insideevs.com, news.gm.com (Chevrolet)