By Kalea Hall and David Shepardson
DETROIT/WASHINGTON (Reuters) -General Motors said on Tuesday it is planning to invest about $4 billion over the next two years at three U.S. facilities in Michigan, Kansas, and Tennessee as it moves to boost production of gas-powered vehicles amid slowing electric vehicle demand.
The company said it will begin production of gas-powered full-size SUVs and light-duty pickup trucks at its Orion Assembly plant in Orion Township, Michigan, in early 2027. Orion Assembly was previously slated to build electric trucks starting next year.
The move calls into question GM’s plan to end the production of gas-powered cars and trucks by 2035. It was welcomed by the White House, which has imposed significant tariffs on imported vehicles to pressure automakers to move more production to the United States.
In March, GM CEO Mary Barra met with U.S. President Donald Trump to talk about investment plans and told the president GM needed relief from California emissions and federal fuel economy requirements in order to expand U.S. production, sources told Reuters. Trump is set to sign legislation on Thursday to rescind California’s 2035 zero-emission vehicle rules.
“No president has taken a stronger interest in reviving America’s once-great auto industry than President Trump, and GM’s investment announcement builds on trillions of dollars in other historic investment commitments to Make in America,” White House spokesman Kush Desai said.
GM’s Fairfax Assembly plant in Kansas is set to start building the all-electric Chevrolet Bolt by the end of this year, and GM says it will now also build the gas-powered Chevrolet Equinox starting in mid-2027.
In a statement, the largest U.S. automaker said it expects to make “new future investments in Fairfax for GM’s next generation of affordable EVs.”
GM last month said it is also investing $888 million at a New York propulsion plant to increase gas engine production.
At its Spring Hill, Tennessee, plant, GM will add production of the gas-powered Chevy Blazer beginning in 2027. It will be built alongside the electric Cadillac Lyriq and Vistiq SUVs as well as the gas-powered Cadillac XT5.
The gas-powered Chevrolet Equinox and Blazer are both currently produced in Mexico. The Equinox will continue to be built in Mexico once production starts at U.S. facilities in order to supply markets outside of North America.
Mexico’s economy minister Marcelo Ebrard said in a social media post he talked with GM and said there is no expectation of any plant closure or layoffs at the automaker’s Mexican plants.
GM said it expects annual capital spending will be between $10 billion and $12 billion through 2027, reflecting increased U.S. investment, prioritization of key programs, and efficiency offsets.
(Reporting by Kalea Hall and David Shepardson; additonal reporting by Kylie Madry in Mexico City Editing by Nia Williams)
