General Motors is ramping up its plans to produce electric vehicles, the latest sign that automakers are in a competitive race to transform and embrace the electrification of cars and trucks.
The automaker said on Wednesday that it plans to build two more battery factories in the United States over the next few years, in addition to the two battery factories it is already building in Ohio and Tennessee.
The company said it plans to spend $ 35 billion on electric vehicles in the five years ending in 2025. This is the second increase in the past eight months. A year ago, GM announced that it would spend $ 20 billion during that time, and in November increased that figure to $ 27 billion.
“Electric vehicle adoption is increasing and reaching an inflection point, and we want to be ready to produce the capacity we need to meet demand over time,” said GM CFO Paul Jacobson , during a conference call with journalists. “We know we will need these battery factories to achieve our goals.”
At the same time, GM also said it expected first-half operating profit of $ 8.5-9 billion, a significant improvement from previous forecasts. The company attributed the improved supply of computer chips, better-than-expected profits from its financing arm, and strong overall demand and prices for new vehicles. GM previously expected its second-quarter operating profit to decline sharply due to the global semiconductor shortage.
GM’s efforts to increase EV spending follow an announcement by Ford Motor that it would begin manufacturing an electric version of its F-150 pickup later this year. Ford recently said it plans to spend $ 30 billion on electric cars and trucks from 2020 to 2025.
Ford has already started selling an electric sport utility vehicle, the Mustang Mach E. Volkswagen has a similar model, the ID.4, which is now in dealerships. Tesla is leading the transition to electric vehicles and is expected to sell around 800,000 cars worldwide this year.
GM introduced an updated version of its electric car, the Chevrolet Bolt this year, which can travel farther on a full charge and added a more spacious version of the same car. A battery-powered GMC Hummer pickup truck is expected to go into production at the end of this year and is expected to be followed by more than 20 electric models over the next four years.
The company did not specify where it planned to install the two additional battery factories. It is building the battery factories in a joint venture with the Korean manufacturer LG Chem.
As part of its announcement on Wednesday, GM said it has reached a deal with Honda Motor to make an electric SUV for the Japanese company’s Honda brand and another for its Acura luxury line.
GM has set a goal of selling one million electric vehicles a year by 2025. It also hopes to produce only electric cars and trucks by 2035.