On Tuesday, May 27, American automotive giant General Motors (GM) announced that it will invest $888 million in its powertrain plant in Tonawanda, New York state to expand capacity and produce a new sixth-generation V8 engine.
According to Reuters, this investment marks General Motors’ strategic adjustment in response to the slowing growth of the electric vehicle market, shifting away from its previous commitment of $300 million for electric vehicle drive unit projects.
General Motors stated that this investment will drive research and production of the sixth-generation V8 engine, which is expected to be used in its full-size pickups and sport utility vehicles (SUVs), enhancing fuel efficiency and emission performance while maintaining strong power.
New York State Governor Kathy Hochul pointed out that this investment will safeguard 870 jobs at the Tonawanda plant, including 177 positions that were at risk of being cut. In return, the New York State government will provide up to $16.96 million in tax incentives.
Meanwhile, New York State announced last week that it will delay penalties for businesses that have not met electric vehicle sales targets by two years to help companies adjust their transition pace more flexibly.
Despite this, General Motors remains committed to its long-term electrification strategy, aiming to achieve full electrification of all its light vehicles by 2035. However, the company has recently adjusted some investment plans, including selling its stake in a joint venture battery plant with LG Energy Solution.
General Motors CEO Mary Barra emphasized that while the company is dedicated to the future development of electric vehicles, it will “adapt flexibly according to consumers’ actual needs.”
Currently, General Motors has launched multiple electric vehicles in the U.S. market under brands such as Chevrolet, Cadillac, and GMC, catering to the diverse needs of consumers.
During negotiations with the United Auto Workers (UAW) in 2023, General Motors had pledged a $300 million investment in the Tonawanda plant for the production of electric vehicle drive units. However, this production plan has not been implemented to date.