General Motors confirmed Monday it will invest $2.2 billion to convert an ageing Detroit assembly plant into the manufacturing heart of its “all-electric future.”
The Detroit-Hamtramck Assembly Plant was one of five North American factories GM said it would close in November 2018 but the automaker reversed course as part of an aggressive plan to launch more than 20 battery-electric vehicles, or BEVs, by 2023. The first to roll out of what is known locally as the “Poletown Plant” will be an all-electric pickup that will reportedly be the subject of an upcoming Super Bowl ad. It is widely expected to bring back the name, “Hummer,” used for a brand GM abandoned in 2010 after emerging from bankruptcy.
The plant will be capable of using an extremely flexible vehicle “architecture,” said GM President Lloyd Reuss, industry-speak for its underlying platform. It will allow the automaker to produce multiple products “for multiple brands, with multiple variants, with multiple customers (offering) different ranges of performance at different price points to meet customers wherever they are.”
After a news conference at the plant, Reuss told NBC News there will be multiple pickup truck models. The Poletown plant also will have the capacity to produce SUVs and crossovers, he said.
What is expected to be called the Hummer pickup will go into production in late 2021. It will be followed in early 2022 by a version of the Cruise Origin, the fully driverless ride-sharing vehicle announced last week by Cruise, GM’s autonomous vehicle subsidiary.
GM has offered relatively few other details about production models, though the carmaker also has confirmed it will build an all-electric Cadillac crossover at a second battery-car plant in northern Detroit, where the Chevrolet Bolt EV is already being produced.
The $2.2 billion that GM will spend on the Detroit-Hamtramck plant is part of a broader investment of $3 billion authorized as part of the contract it negotiated last autumn with the United Auto Workers Union. That includes a number of other projects supporting the automaker’s aggressive plan to “electrify” its vehicles. Late last year it said it would set up a factory in Lordstown, Ohio to build batteries, a joint venture with South Korea’s LG Chem worth $2.3 billion.
Including plants and products, GM has already confirmed EV-related investments of more than $10 billion, Reuss told NBC News, a figure he expects will go substantially higher as more models roll through the product development process.
Some will be targeted primarily at the U.S., others at overseas markets, such as China. Many will be marketed worldwide.
The GM president acknowledged that the investment program is risky. While battery-car sales did surge in 2018, demand leveled out last year, rising barely 3 percent overall. Nonetheless, industry analysts are anticipating the growth rate will accelerate rapidly as more products come to market. A new study by the Boston Consulting Group forecasts battery-based vehicles will account for 51 percent of the U.S. auto market by 2030.
“Word-of-mouth will be critical” to increasing demand for EVs, Reuss said, noting studies showing extremely high satisfaction rates among owners. Equally important, however, is the fact that battery costs are tumbling and the network of public charging stations is rapidly expanding.
GM is just one of many manufacturers betting on EVs. Volkswagen has committed $12 billion to battery-car development, and Ford has committed over $11 billion.