The electric vehicle boom has spelled the doom for Internal Combustion Engine (ICE) automobiles globally, but General Motors has signaled it will go on manufacturing trucks and SUVs running on conventional fuel.
According to a Reuters analysis, GM will continue to produce internal combustion vehicles for at least another 10 to 12 years. GM had earlier said that it would transition into electric vehicles by 2035, leading auto analysts to believe that the stoppage of the production of ICE vehicles would happen much earlier than that.
However, according to recent announcements and strategy tweaks by GM, the American auto giant will go ahead with the manufacture and sale of ICE vehicles up until at least 2035. This will enable the company to make billions of dollars in profits until it pulls the curtains on the lucrative segment.
GM Plans More Upgrades
In the latest signal that it is not anywhere near winding up the production of ICE vehicles, GM said this week it is spending $3 billion to upgrade some of its largest plants in North America. Over the past week, GM said it would be making huge investments in five plants in the US and Canada that make full-size internal combustion engine vehicles, Reuters reported.
One senior GM executive said last week the company will keep making full-size ICE vehicles 'for years to come,' the agency added. "We're strategically transitioning the business, while at the same time leveraging our important ICE portfolio with new and refreshed products, driving continued robust demand for our vehicles," Chief Financial Officer Paul Jacobson said in April.
The EV Drive
In the US, much like the world over, there is intense focus and generous investments in the EV sector. Last year, the Biden administration unveiled plans to spend $3.1 billion on boosting domestic production of electric vehicle batteries and other essential components. The funding is expected to support plans of domestic companies to construct new factories and rebuild the current ones to make EV batteries and related units. According to the administration, more than 30 companies are in line to receive grants worth at least $50 million each.
Although the latest reports show that GM is closely guarding its legacy business, the company is also investing huge amounts of money in the EV segment. A 2022 report said General Motors and a joint venture with LG Energy Solution were making investments of more than $6.5 billion in new electric truck and battery plants. The Michigan Strategic Fund said Friday it plans to consider at a Tuesday board meeting GM's and the Ultium Cells joint venture's plans to invest $6.5 billion and add 4,000 jobs at sites in Lansing and Orion Township.
EU Plans
In March this year, the European Union and Germany announced a deal has been struck to phase out combustion engine vehicles entirely by 2035. "We have found an agreement with Germany on the future use of e-fuels in cars ... We will work now on getting the CO2 standards for cars regulation adopted as soon as possible, and the Commission will follow up swiftly with the necessary legal steps," EU Commission Vice President Frans Timmermans said.
