General Motors Co (GM) says it will spend more than the $35 billion previously planned through 2025 to speed up launches of new electric vehicles, and noted that investments in technology will take priority over richer profits next year, Reuters reports.
GM said it expects 2022 operating profit of $13 billion to $15 billion, in line with a record 2021 operating profit of $14.3 billion, even though vehicle production is expected to increase as semiconductor supplies improve and pricing power remains strong.
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“What we’re doing here is essentially redeploying some of the upside earnings from the additional volume into acceleration and taking a longer-term view than just trying to maximize short-term profit,” GM chief financial officer Paul Jacobson said.
GM plans annual capital spending of $9 billion to $10 billion this year and for the next several years, Jacobson said. GM is not paying a dividend.
Chief executive officer Mary Barra said GM was “accelerating within the ’20 to ’25 timeframe from the $35 billion, but there’s also some investments that we’re pulling in” that were planned later in the decade.
Barra said GM would announce the site for a fourth electric vehicle battery plant by the end of June, and will invest in a third electric truck assembly plant. The company has 110,000 reservations for the electric version of its Silverado pickup, Barra said.
Barra did not give a new figure for total EV investments through 2025. GM said in its quarterly report it expects to spend $1.5 billion more this year to speed software development and accelerate its EV portfolio.
GM’s share price has fallen from its recent highs as rival Ford Motor Co increased investments in its own electric vehicle programs, particularly the electric Ford F-150 Lightning pickup truck. By contrast, GM has until now taken a more conservative approach, planning more EV launches and capacity for the latter years of the decade.
Now, Barra and other GM executives are turning up the volume on their argument that GM has a better long-term plan, and is ready to move faster in response to growing demand for electric vehicles.
Barra said offering more affordable electric vehicles is key to the company’s plans. GM will launch a $30,000 electric Chevrolet Equinox next year and is working on another, lower priced electric vehicle.
By contrast, Tesla Inc CEO Elon Musk last week said the electric vehicle market leader is not working on a $25,000 electric vehicle he once promised.
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During the fourth quarter, GM built almost no electric vehicles in North America because of a battery recall that shut down production of Chevrolet Bolt EVs.
This year and next, Barra said GM plans to deliver 400,000 EVs in North America, and plans 20 electric models in North America and 30 globally by 2025.
