GM's Michigan battery projects fill in more of EV production map

DETROIT — General Motors' 90-year reign as the country's top-selling automaker just ended, but CEO Mary Barra has the company focused on a different race that she says is more critical to its future.

"We want to lead in EVs. Full stop," she told "CBS Mornings" last week, after GM committed nearly $7 billion toward electric vehicle and battery production in Michigan.

Barra said she's confident GM can dethrone Tesla, which owned an estimated 72 percent of the U.S. EV market in 2021, by "mid-decade." The latest projects represent GM's biggest steps yet toward that goal and the largest investment in its history.

Orion Assembly, which has limped along building only a few hundred Chevrolet Bolts a week on just one shift, is now slated to churn out up to 360,000 electric Chevrolet Silverados and GMC Sierras a year after a $4 billion overhaul. Combined with its newly renovated Factory Zero plant in Detroit, GM says it will have the capacity to make 600,000 electric pickups annually. GM sold about 768,700 Silverado and Sierra light trucks in the U.S. last year, according to the Automotive News Research & Data Center.

"We know the demand is here," Barra said. "We have had great response from hundreds of thousands of customers interested in our EVs that we've already shown. Our EV rollout plan represents the broadest EV portfolio of any automaker and fully establishes our path toward EV leadership."

The other piece of GM's EV puzzle is its battery plants. GM and its Ultium Cells joint venture partner, LG Energy Solution, are spending $2.6 billion to build a battery plant in Lansing, Mich., their third in the U.S. Ultium Cells has battery plants under construction in Warren, Ohio, and Spring Hill, Tenn., and officials have said a fourth is needed, at a minimum.

"We're going to put the new cell plants in the proximity to supply that footprint on a transportation basis," GM President Mark Reuss told reporters last week. "These batteries and battery packs are relatively heavy. We want to cut that transportation cost as much as we can, make it efficient and be agile with the supply and demand of those cells and packs to our assembly plants."

The Michigan investments are part of the $35 billion GM has committed to electric and autonomous vehicle development through 2025, when it aims to have more than 1 million units of EV capacity. By 2030, GM aims to convert half of its North American assembly capacity to EV production.

As GM plots its EV map, proximity between assembly and battery plants will be crucial.

The Ultium plant in Ohio will supply Factory Zero and CAMI in Ingersoll, Ontario, a source familiar with the plans told Automotive News. The Tennessee plant will support Spring Hill Assembly, and Lansing will supply Orion and future EV plants that haven't been announced, GM said.

That leaves Ramos Arizpe in Mexico, the plant expected to build the electric Chevy Equinox and Blazer in 2023 and a Honda crossover in 2024, according to AutoForecast Solutions.

The next battery cell plant "may very well need to be in Texas or Arizona or New Mexico, somewhere close enough that they could take [a battery cell] across the border and put it into electric vehicles built there," said Sam Fiorani, the firm's vice president of global vehicle forecasting.

Orion Assembly, north of Detroit, already builds EVs, but with GM's previous-generation EV architecture instead of Ultium batteries. The Bolt EV hatchback and Bolt EUV crossover that Orion produces today also are much smaller than the Silverado and Sierra that the plant will make starting in 2024.

"The assembly lines have to be reconfigured completely because these are factories that have been building internal combustion engine vehicles for generations in some cases, and building an EV takes a different assembly style," Fiorani said. "It is a completely different type of assembly, which requires rethinking the whole assembly line format."

GM invested $2.2 billion to turn Detroit-Hamtramck Assembly into Factory Zero for EV production in 2020. It repurposed 80 percent of the plant's infrastructure and equipment, and the retooling and advanced technology updates cost two-thirds as much as an all-new plant would have, Gerald Johnson, GM's executive vice president of global manufacturing and sustainability, said in October.

Renovating existing plants, rather than building from undeveloped sites, will save GM $1.5 billion per plant and a total of $15 billion by 2030, he said.

GM's tactic differs from Ford Motor Co.'s plan to build battery plants and an electric pickup plant on two new campuses in Tennessee and Kentucky.

GM announced its Michigan investment last week after winning approval for tax incentives of at least $824 million. Other states were in the running, Reuss told reporters, but Michigan — the home of GM's headquarters, global technical center and first electric truck plant — was "highly desirable," he said.

"If you look at where we put other cell plants, like Lordstown, Ohio, and Spring Hill, Tenn., of course we are looking at other states where we have footprints," he said. "Making efficient and agile manufacturing footprint decisions is only good business, but also we have a vested interest in Michigan and Detroit."

From GM's plans so far, it's clear that proximity is a priority when heavy battery cells and packs need to reach assembly plants. Battery cell plants, Fiorani said, "need to be built where they're cost-effective."