The Race Is On: GM Announces $35 Billion EV Investment A Month After Ford Boosts Spending

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by Tyler Durden
Thursday, Jun 17, 2021 - 10:54 AM

The EV race is officially on.

General Motors announced this week that they are going to be boosting global spending on EVs to $35 billion through 2025, a 30% rise from its most recent forecast, according to Reuters. GM's announcement comes less than a month after Ford announced that it was going to boost its EV spending by more than 33% to over $30 billion by 2030. 

With the increased investment, GM is going to build two new U.S. battery plants and says it will contribute to some of its ongoing EV investments. 

Mary Barra met with U.S. House Speaker Nancy Pelosi and other key Democrats this week, as well, as the CEO looks to find new ways to work with Washington. The Biden administration has "proposed $174 billion to boost EVs and charging as part of his infrastructure plan, including $100 billion in new EV rebates" that we're sure GM would like to get their hands on.

GM has backed off recent criticism of emissions rules to fall in line with states like California, who have been the most aggressive in setting new (much stricter) standards. 

G.M.’s chief financial officer, Paul Jacobson, told the NYT on Wednesday: “E.V. adoption is increasing and reaching an inflection point, and we want to be ready to produce the capacity that we need to meet demand over time. We know we’ll need those battery plants to further our goals.”

In early June, we noted that both GM and Ford were blowing EV sales out of the water. At the time, General Motors delivered a positive outlook to the market, saying it was anticipating "significantly better" results for the first half of 2021. The company said:

"As a result of GM's ongoing efforts to prioritize semiconductor usage, its success engineering solutions that maximize the utilization of chips as well as the pull-ahead of some projected semiconductor deliveries into the second quarter, the company now expects its first-half financial results to be significantly better than the first-half guidance previously provided.  GM is optimistic about the full year and expects to share additional information during its second-quarter earnings conference call on Aug. 4."

The company also said it is taking steps to "increase deliveries to dealers and customers in the United States and Canada to meet strong consumer demand for Chevrolet, Buick, GMC and Cadillac," in a press release

Despite addressing the semi shortage, stating the situation "remains complex and very fluid", GM says it has still found "creative ways to satisfy customers". Phil Kienle, GM vice president, North America Manufacturing and Labor Relations said: "Customer demand continues to be very strong, and GM's engineering, supply chain and manufacturing teams have done a remarkable job maximizing production of high-demand and capacity-constrained vehicles."

Recall, we posted just yesterday that GM was so desperate to hire employees, it was considering waiving its mandatory drug testing. 

The company is reportedly having extreme difficulty finding temporary summer workers at the plant that produces the Chevy Silverado, the report says. GM is seeking to hire 450 temporary part time employees at Flint and 275 at Fort Wayne.

The UAW believes that "the company’s testing for marijuana use is limiting and deterring potential employees," the report says. We wonder if they have looked closely at how much free money the government has been doling out over the last 18 months.

Regardless, medical and recreational use of marijuana is already legal in Michigan. But that hasn't stopped GM from continuing to use marijuana testing that uses hair specimens and can "trace back for weeks". 

"That could turn off younger job applicants who then don’t show up to the interview," said UAW shop chairman Eric Welter. Adding to the hiring difficulty is a $16.67 per hour starting wage and a "temporary" status that employees are assigned. 

GM spokesperson Dan Flores alluded that the idea is something that’s being “discussed internally,” according to the report. 

The shortage of workers comes at a time when GM, like many other auto companies, is continuing to deal with the struggle of a global semiconductor shortage.

"Our supply chain organization is working closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impacts on GM. Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021," Mary Barra said earlier this year.