General Motors Co boosted its spending on electric and autonomous vehicles on Wednesday, advanced plans for two battery plants in the United States and forecast stronger-than-expected second-quarter earnings.
He does not. 1 The American automaker said it will now spend $ 35 billion through 2025 on electric vehicles, a 75% increase from March 2020 before the COVID-19 pandemic shut down the industry.
GM shares rose 1.5% in late trading on Wednesday.
The additional spending from GM accelerates a global arms race between automakers and technology companies to expand electric vehicle offerings. Consulting firm AlixPartners said Wednesday that electric vehicle investments by 2025 could total $ 330 billion, an increase of 41% over the firm’s five-year comparable investment outlook a year ago.
“EV adoption is increasing and reaching a tipping point,” GM CFO Paul Jacobson told reporters on a conference call. “We want to be ready to be able to produce the capacity we need to meet demand over time.”
The challenge for GM and other automakers will be that consumer and business demand for EVs will not be on track for the next several years to grow fast enough to sustain all new market entries, AlixPartners warned in its forecast. .