General Motors $GM ( ▲ 0.89% ) announced Tuesday that it will build the Cadillac Escalade, Chevrolet Silverado, and GMC Sierra light-duty pickups at its Orion plant—further highlighting how the Detroit automaker is shifting its electrification strategy.
The details: The announcement—which comes as no surprise given the growing focus GM has put on gas-powered vehicles in recent months—is a detour from GM’s previous plans for the Michigan facility, which was slated to become a major production hub for electric trucks.
The Detroit automaker received $480 million in state grant funds to expand the Orion facility to increase its EV production.
GM is now planning to use the plant to align its vehicle production with consumer demand for gas-powered models.
The plan also enables GM to increase production capacity of the Chevrolet Suburban and Tahoe as well as the GMC Yukon and Yukon XL vehicles at its Arlington Assembly plant in Texas.
Apparently, the shift in production plans at the Orion Township Assembly facility won’t have any impact on the funds granted to GM to be allocated to increase electric vehicle production. The plant—which already produces batteries—has been expanded to produce battery modules.
What they’re saying: “GM will begin production of the Cadillac Escalade, as well as the Chevrolet Silverado and GMC Sierra light-duty pickups at Orion Assembly in early 2027 to help meet continued strong customer demand. GM is proud to call Michigan home, and these moves will further strengthen our manufacturing footprint,” said GM spokesperson Tara Kuhnen.
Why it matters: GM’s new production plans for the Orion facility are part of a more aggressive strategy announced by the automaker in June to invest $4 billion in three manufacturing plants to ramp up production of gas-powered vehicles.
Between the lines: GM’s production shift certainly makes sense—given the profit margins for gas-powered trucks and SUVs in comparison to EVs as well as all the other factors poised to slow electric vehicle sales down in the months to come.
In 2023, it was projected that GM could yield $50 billion or more in profit by producing gas-powered trucks and SUVs before transitioning to all-electric by 2035—pre-tariffs.
GM has reduced its losses with EVs—but it’s been estimated that the automaker lost around $2.5 billion on the 189,000 electric vehicles it built and sold to dealerships last year.
Bottom line: GM’s move to nix (at least for now) prior plans to make its Orion facility an EV manufacturing hub—opting instead to prioritize gas-powered vehicle production at the plant while preserving some battery manufacturing capabilities, highlights GM’s ability to balance long-term electrification goals with current market realities.
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