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GM charges up its electric vehicle program with $2B investment in Tennessee plant

General Motors' plans include launching an electric Hummer this week.

General Motors said Tuesday it will invest about $2 billion in its Spring Hill, Tennessee, assembly plant to produce the new Cadillac Lyriq electric SUV.

The announcement comes on the same day that the automaker will officially unveil another new long-range battery-electric vehicle, the GMC Hummer. GM plans to have “20 or more” battery-electric vehicles, or BEVs, in production by 2023.

“We are committed to investing in the U.S., our employees and our communities,” said GM Chairman and CEO Mary Barra. “These investments underscore the success of our vehicles today, and our vision of an all-electric future.”

The Spring Hill plant was originally intended to push the boundaries of manufacturing as the home of GM’s Saturn brand. However, Saturn was abandoned when GM emerged from bankruptcy a decade ago. It currently produces a mix of crossover-utility vehicles that include the Cadillac XT5 and XT6, as well as models for the GMC and Australian Holden brand.

The Tennessee complex, which covers 7.9 million square feet and currently employs about 3,400 hourly employees, will become the third assembly plant GM is dedicating to BEV production. The others include a factory in Orion Township, Michigan, now assembling the automaker’s first long-range model, the Chevrolet Bolt. The third was recently renamed Plant Zero and squats on the border of Detroit and the enclave of Hamtramck.

While the Spring Hill plant will continue producing gas-powered products like the Cadillac crossovers, the other factories will be dedicated exclusively to electric vehicles. Though specific plans for Plant Zero have not yet been announced, it is widely expected to handle production of the new Hummer, which will be offered in both SUV and pickup form, as well as an all-electric Chevrolet pickup — and possibly the Nikola Badger pickup.

GM was one of the first automakers to bring an all-electric vehicle to market, the original EV1, but it is only now taking serious aim at the segment — and at market leader, Tesla. By 2023, it expects to have a broad range of offerings for all four North American brands, as well as other brands offered abroad, especially in China where its new Wuling Micro battery-car is currently outselling Tesla.

The automaker has confirmed it will offer U.S. buyers both the existing Chevy Bolt as well as a stretched version to be called the Bolt EUV in the coming months. Next year will see it launch the two versions of the Hummer, with the Lyriq to follow in early 2022.

“The irony is not lost on anyone that this former gas-guzzler (the Hummer) is coming back as an electric vehicle,” said Ivan Drury, senior manager of Insights for Edmunds. “With that said, by demonstrating that ‘big’ doesn’t necessarily mean inefficient, the Hummer EV also represents a monumental paradigm shift that not only benefits GM, but also will help push consumer acceptance of EVs into a new realm.”

Critically, GM expects its new Ultium batteries to cost about $100 per kilowatt-hour, down from $145 per kWh with the current Chevrolet Bolt. For a vehicle like the Hummer, which is expected to have a pack of at least 100 kilowatt-hours, the savings would be substantial. And GM officials have told NBC their longer-term goal is to push down as low as $70 per kWh. According to the Boston Consulting Group, that would essentially put BEVs on parity with comparable gas-powered products.

With so many new BEVs in the works, industry analysts question whether the three electric vehicle plants GM has confirmed will be enough. Some, like the Wuling Micro, will be produced and sold only overseas.

The automaker’s Tuesday announcement also included another $153 million to be invested in five Michigan plants for future products.