By General Motors Co. announced on Tuesday that it is postponing the opening of its electric-vehicle plant in the Detroit area by one year due to uncertainties surrounding the demand for EVs.
GM’s Orion plant, which is being reconfigured to manufacture EV pickup trucks, will now begin operations by late 2025 instead of next year, according to the automaker. The decision was made in order to optimize capital investment and align with the evolving market demand for electric vehicles. GM also mentioned that they have identified engineering enhancements to improve the profitability of their products.
This marks the second time that plans for a U.S.-based EV-related plant have been delayed. Ford Motor Co. announced in late September that it was putting a hold on its $3.5 billion battery plant, also located in Michigan.
In the meantime, autoworkers have been on strike at various GM, Ford, and Stellantis NV (formerly Fiat Chrysler) facilities for over a month.
The existing challenges in making EVs profitable are evident, as GM recently discontinued its Chevy Bolt model, only to unveil plans for a mass-market electric sedan based on an updated platform in the future.
Affected workers at Orion will be provided with alternative opportunities within Michigan, including positions at GM’s “Factory Zero” battery plant. This facility has been experiencing steady production increases, and significant scaling is scheduled for 2024.
GM previously announced a $4 billion investment in January 2022 to transform Orion into a manufacturing hub for electric trucks utilizing their Ultium EV platform. This initiative includes substantial expansion of facilities and capacities, including the addition of new body and paint shops, general assembly areas, and battery pack assembly zones.
The production of Chevy Bolts will proceed as planned until the end of this year, GM assured.
Despite the announcement, GM’s stock showed resilience, holding onto gains of 0.9% on Tuesday afternoon. However, the stock has experienced a 9% decline this year, while the S&P 500 index recorded gains of approximately 14%.
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