Faced With Growing Competition, General Motors is Increasing Electric Truck & SUV Output 6 Times More Than Previously Planned, Sources Say

author: Eric Walz   

A 2022 Hummer EV comes off of the assembly line at GM's Factory ZERO in Michigan.

General Motors is in the midst of a massive transformation to eventually become an electric automaker. As part of the plan, the company aims to phase out gas-powered passenger vehicles by 2035. 

But the bulk of GM's profits are currently from the sales of full-size SUVs and pickups, which makes the transition a bit more difficult to maintain its margins. This is one reason why GM is making plans to increase output, with the goal of luring buyers to switch to electric versions of its popular gas-powered models like the Chevy Silverado.

Reuters reports that General Motors now plans to increase production of its electric trucks and Cadillac sport utility vehicles this year six times more than previously planned, according to information shared with suppliers.

GM told suppliers for its electric GMC Hummer EV trucks to plan for production of 21,000 of those vehicles this year at the automaker's Factory Zero in Detroit, up from the previous plan to build just 3,800 vehicles.

GM said it has reservations for nearly 59,000 GMC Hummer EV pickups and SUVs and more than 110,000 for the electric Chevrolet Silverado pickup that's due to start production next year, Barra said.

The new details shared with suppliers also indicates that GM intends to increase production of its new battery-powered Cadillac Lyriq SUV to a total of 25,000 vehicles this year, up from a previous target to build just 3,200 of these vehicles this year. However its still seems like a small number when compared to Tesla's annual output. 

The Hummer was GM's first electric truck and created a lot of buzz when the automaker announced its return as an electric truck in Jan 2020. But the Hummer EV starts at $108,700. This lack of affordability all but ensures that it will never become a mainstream vehicle for GM in the U.S. So the company will need to lure buyers in with its other electric models.

Although the 100,000 reservations GM received so far for the Silverado EV is significant, not all of these reservation holders will actually buy the truck, especially if there are long wait times to take delivery. GM's rival Rivian is facing the same situation of too many orders for its R1T pickup, but currently does not have enough production capacity to meet demand. 

In addition to new competition from Rivian, California electric truck startup Lucid Group Inc is also ramping up production, and plans to introduce a new electric SUV in 2023.

GM's electric Chevy Silverado will debut as a 2024 model.

The move to increase EV production makes sense, as GM will need to gain ground on Tesla to remain competitive in the EV space. But building only a small number of EVs won't really help GM catch up to its competitors, as many new battery-powered vehicles from other automakers will be hitting the market over the next two years.

GM is also planning to re-start production of its more affordable Chevrolet Bolt EV and EUV, which have been idled since last year as the automaker deals with a massive battery recall due to fire risks.

"As we have said, we have announced battery cell and assembly capacity investments that will give us more than 1 million units of EV capacity in North America by the end of 2025," GM said in a statement on Tuesday. "We now have teams working to accelerate all of our upcoming EV launches, and our target is to deliver 400,000 EVs in North America over the course of 2022 and 2023."

Barra said last week demand remains strong for the Lyriq. GM plans to transform its luxury division Cadillac into an electric-only brand, beginning with the Lyriq.

Starting at $58,795, the forthcoming Lyriq from Cadillac could become a big hit for GM, that is of course, if it's available for customers to take delivery. The luxury electric SUV is much more affordable than the Hummer EV and Silverado EV, and the compact SUV and crossover segment is widely popular with consumers, so it makes sense that GM plans to increase production.

GM is also facing new competition from its domestic rival Ford Motor Co in the truck and SUV segment with the upcoming launch of the F-150 Lightning electric pickup this spring. Ford says it plans to expand its EV production capacity to 600,000 vehicles a year by 2023. 

Also last week, Ford began shipping the first electric E-Transit vans to commercial customers  this week, giving the automaker a headstart over GM in the electric commercial vehicle space.

But perhaps GM's biggest competition will continue to be Tesla for the foreseeable future. Tesla sold 936,000 EVs globally last year, its highest number ever. Tesla is preparing to start production at its second U.S. factory in Austin Texas, which will essentially double its manufacturing output in the U.S.

Last month, GM announced its was investing more than $7 billion in four Michigan manufacturing sites to build electric vehicles and batteries, which will create 4,000 new jobs as the automaker begins its transitions to becoming an electric automaker. The massive investment will significantly increase GM's production capacity for electric vehicles. 

The $7 billion investment is the single largest investment announcement in GM's 100+ year history. It includes $4 billion to construct a new Ultium Cells battery cell plant in Lansing and the conversion of GM's assembly plant in Orion Township, Michigan for production of the electric Chevrolet Silverado pickup and electric GMC Sierra. 

Production of the Silverado EV and electric Sierra, will begin at Orion in late 2022 or early 2023.

"It will make our home state the epicenter of the electric auto industry," said Barra last month.

GM other assembly plants in North America currently building, or being converted to build EVs, include Factory ZERO in Detroit and Hamtramck, Michigan and its Spring Hill Assembly plant in Spring Hill, Tennessee where the Cadillac Lyriq will be built. 

Looking ahead, GM says its will be able to produce 600,000 electric trucks a year in Michigan by the end of 2025. 

In total, GM plans to introduce 30 all-new EVs globally through 2025, two-thirds of which will be available to customers in North America.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.