General Motors Co. GM 6.02% plans to invest more than $3 billion to make electric vehicles in Michigan, people familiar with the matter said, a potential win for the car maker’s home state after recent commitments of auto projects to Southern states.
GM is finalizing plans for two electric-vehicle projects in Michigan. One would convert its Orion Assembly plant in suburban Detroit to serve as its hub for production of electric pickup trucks, the people with knowledge of the plans said. The renovation would cost at least $2 billion and would be expected to create more than 1,500 jobs at the factory, which today is lightly used, the people said.
Also, the auto maker intends to build a battery-cell factory near one of its assembly plants in Lansing, Mich., the people said. That project, involving a 50-50 joint venture between GM and its battery partner, LG Energy Solutions, would split more than $2 billion between GM and LG and create around 1,200 jobs, the people said.
GM officials are in talks with local governments to secure tax abatements and other approvals for the projects, and the plans could fall through or be altered, the people said.
GM shares rose about 5% in afternoon trading Friday.
Auto makers are rushing to secure future battery supplies as the industry prepares to roll out dozens of new plug-in models over the next few years. Electric vehicles accounted for only about 4% of U.S. vehicle sales this year through November, and about 8% of global sales, according to an investor note Friday from Credit Suisse.
But sales are growing rapidly as auto makers introduce new models and governments around the world tighten restrictions on tailpipe emissions. Credit Suisse said it now expects electrics to account for 24% of new-vehicle sales globally by 2025, up from a previous forecast of 17%.
Toyota Motor Corp. plans to spend $1.25 billion on a new battery plant in rural North Carolina, according to a public-incentives deal approved Monday. Ford Motor Co. in September said it would invest more than $11 billion to build three battery plants, two in Kentucky and one in Tennessee, near Memphis, along with an electric-truck plant, its first new U.S. assembly plant in decades.
The planned GM investments would be notable for Michigan, especially after Gov. Gretchen Whitmer expressed disappointment that the state wasn’t selected for Ford’s projects. Her office didn’t immediately respond to a request for comment.