Big automakers have watched for a long time as Tesla has continuously proven that they can surprise the market with progress on electric vehicles. Now, Detroit wants to get in on the action. Mike Colias reports:
General Motors Co. GM -1.42% is raising its investment in electric vehicles—the second boost in recent months—and pushing deeper into battery production, making it the latest global auto maker to accelerate its transition to plug-in cars.
The company also raised its guidance for pretax profit excluding one-time items for the first half of this year, to between $8.5 billion and $9.5 billion, compared with its prior forecast of $5.5 billion. GM attributed the improved outlook to continued strength in the U.S. vehicle market and progress combating the semiconductor shortage that has stymied global vehicle production this year.
GM said Wednesday that it will spend $35 billion on electric and autonomous vehicles through 2025, about 30% higher than a target set last November. The increase reflects plans to add two more battery factories in the U.S., joining a plant under construction in Ohio and another slated for Tennessee.
Chief Executive Mary Barra said GM is moving faster because the company perceives momentum building for electric-vehicle adoption in the U.S. and has seen a positive response to the future models it has shown.
GM and other car companies have been steadily raising their bets on electric cars in the face of stiffening tailpipe-emissions regulations globally. The moves, which at times seem like dueling declarations, also have attracted investors eager to tap the growth potential of battery-powered vehicles.
Two weeks ago, GM rival Ford Motor Co. F -0.13% said it would increase its investment in electric-vehicle spending through mid-decade by about one-third, to $30 billion by 2025. That sum includes some money spent in recent years. Ford also said Wednesday that it expects half of vehicle sales from its luxury Lincoln brand to be fully electric within four years.
Meanwhile, Volkswagen AG is spending about $40 billion through mid-decade on electric vehicles.
In the past year, the amount of planned spending by car companies on electric vehicles has surged 41%, according to consulting firm AlixPartners LLP.
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