General Motors (GM) announced a significant delay in the production of all-electric trucks at its Orion Assembly plant in Michigan, pushing back the timeline by at least a year. This delay is attributed to the company's desire to manage capital investments more effectively and to implement necessary improvements that would enhance the profitability of their new electric vehicles (EVs).
The production of the next-generation EVs at Orion Assembly plant, located in suburban Detroit, will start by late 2025 despite its original plan of starting in 2024. The plant manufactures Chevrolet Bolt EV models, but production of these models is expected to cease at the end of this year.
"General Motors today confirmed it will retime the conversion of its Orion Assembly plant to EV truck production to late 2025 to better manage capital investment while aligning with evolving EV demand. In addition, we have identified engineering improvements that we will implement to increase the profitability of our products,” the company said in a statement.
GM's decision to delay its EV truck production reflects the challenges that traditional automakers are facing as they transition to EVs. The adoption of EVs, while promising, is hindered by their inherent production and purchase costs.
GM says this production delay is not related to the ongoing contract negotiations with the United Auto Workers (UAW) union. However, these negotiations do involve discussions about EVs, and the current contract proposals put forth by GM are expected to be more expensive than those of previous years. The UAW, which represents workers at Orion Assembly, has yet to respond to these developments.
The delay raises questions about GM's previously announced EV goals, including cumulative production targets of 400,000 EVs in North America from 2022 through mid-2024, which had already faced setbacks. Additionally, GM has publicly stated it aims to exclusively offer consumer EVs by 2035.
As a result of this delay, new electric versions of the Chevrolet Silverado and GMC Sierra, originally intended for production at Orion Assembly, will now be assembled at GM's Factory Zero facility in Detroit.
In January 2022, GM unveiled an investment of US$4 billion to convert Orion Assembly into an electric truck production plant. The plan included expanding the facility's capacity with new body and paint shops, along with areas for general assembly and battery packs. During the retooling period at Orion Assembly, about 1,000 hourly workers will have the option to transfer to other GM facilities in Michigan.
Are you ready to set yourself up for success in 2024? Join us at Mexico Business Summit 2023, the must-attend B2B conference for Mexico’s business leaders!
Taking place on Nov. 28-30, 2023, at Expo Santa Fe in Mexico City, this high-level multi-industry conference offers unmatched opportunities to get inside perspectives on key industry trends, access actionable business intelligence, generate pre-qualified leads and identify new opportunities in a unique cross-industry networking environment.
Mexico Business News offers you an exclusive MX$2,000 ticket discount by using this code: MBS2023MBN2000.
Don't miss this opportunity and get your tickets here: https://mexicobusiness.events/MBS/2023