Easy come easy go: Detroit 3 gain and lose millions in EV investments

The Detroit 3 and government authorities remain split on whether to ramp up or scale down electric vehicle investments, with Ford and Michigan canceling millions in public funding as Stellantis and GM receive massive subsidies.

New investments

• General Motors and Stellantis are set to receive a combined $1.7 billion from the federal government to boost EV production at factories across eight states.

• The largest grant is worth $500 million, to be distributed to GM’s Lansing Grand River Assembly Plant in Michigan. The automaker plans to invest a total of $1.25 billion in EV projects at the facility, a commitment stemming from its agreement with the United Auto Workers (UAW) union last year.

• Another grant, worth $334.8 million, will be used to convert Stellantis’ Belvidere Assembly plant in Illinois into an EV production hub. The facility initially manufactured the Jeep Cherokee, but was idled early 2023. However, the company agreed to reopen the facility under pressure from the UAW.

Cut investments

• While the Biden Administration, GM and Stellantis are boosting investments in EV manufacturing, Ford and Michigan are doing the exact opposite.

• Ford and The Michigan Economic Development Corp. have agreed to scale back public funding for two EV initiatives, resulting in a total reduction of $750 million.

• The state initially expected to provide roughly $994 million in tax credits and grants to Ford for the development of a new battery factory and expanded production at multiple facilities across Michigan. Now, it plans to only invest $225 million.

• Michigan and Ford officials attributed the decision to the state of the EV market, which they say has performed worse than they originally anticipated.

Bottom line: The contradictory moves underline the uncertainty automakers continue to face in the EV market. However, with Detroit manufacturing starting to lag behind foreign competitors in the U.S., all three companies will need to carefully weigh the risks of boosting or canceling investments that could result in an imbalance of ICE and EV inventory.

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