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GM & LG Awarded $600M Grant For Michigan EV Factory Expansion

Ollie Martin - AskTraders News writer
Ollie Martin trader
Updated 25 Jan 2022

Key points:

  • GM & LG awarded funding from state of Michigan for EV/battery manufacturing, including a $600M direct grant
  • The new facilities marks GM's biggest investment over 114 years
  • Will the expansion plans keep GM's head above water in the tightening EV race?

GM (NYSE: GM) has arguably been lacking a little in the EV race compared to its largest competitors; seemingly playing catch-up in a struggle to compete, illustrated by disappointing sales numbers in recent earnings releases. As a key figurehead in the US automobile industry, GM needs to maintain a reputation of relevance by ramping up EV production at a time where it’s make-or-break for capitalizing on market share. 

Today, in a promising development for the company, GM was awarded tax incentives exceeding $824M for up to $7B in new capital investment in expanding GM’s EV and battery production in Michigan – this includes a $600M direct grant for GM and LG from the state of Michigan.

Read Also: Best EV Stocks To Buy Now

The move is a testament to GM’s potential in the EV space, in what GM CEO Mary Barra described as the single largest investment in the company’s 114-year history. This is just the start for GM, the company plans to spend around $4B in the next three to five years adding manufacturing space to its Orion Assembly plant, as well as a further $1.5 to $2.5B in a partnership with LG for the construction of a proprietary Ultium battery manufacturing plant.

A promising move by GM; but one that is currently overshadowed by the current market competition. GM’s new range of electric pickups will have to find footing amongst the success of Ford’s anticipated F-150; and with a few years until the plant reaches full manufacturing capacity, GM’s short-term outlook remains susceptible to shortcomings.

Ollie Martin - AskTraders News writer
Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.