Legacy automaker General Motors (GM) announced that it would invest up to $4 billion in three U.S. plants over the next two years to boost domestic manufacturing of both gas and electric vehicles (EVs). The investment is aimed at ramping up production at GM’s facilities in Michigan, Kansas, and Tennessee. GM’s decision to focus more on U.S.-made cars comes amid President Donald Trump’s 25% auto tariffs. These tariffs could potentially disrupt supply chains and hurt the bottom lines of American automakers. GM stock is rising on the news.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
GM CEO Mary Barra had previously warned of a potential $4 billion to $5 billion impact in fiscal 2025 from tariffs on auto and auto parts imports. Plus, the government has implemented 50% tariffs on imports of steel and aluminum, which could further hurt automakers. In 2024, GM built and imported nearly 1 million vehicles from Mexico and Canada, while building 1.7 million autos in the U.S. Additionally, it imported nearly 415,000 autos from South Korea and some 47,000 Buick Envision SUVs from China for U.S. dealerships. With this new investment, GM could be shifting its strategy to reduce reliance on foreign manufacturing.
GM Focuses on U.S. Auto Production to Avoid Tariffs
Following the investment, Orion Assembly in Orion Township, Michigan, will begin producing gas-powered full-size SUVs and light duty pickup trucks in early 2027. Fairfax Assembly in Kansas City, Kansas, will scale up production of the gas-powered Chevrolet Equinox beginning in mid-2027 and the all-electric Chevrolet Bolt by the end of this year. At Spring Hill Manufacturing in Spring Hill, Tennessee, production of the gas-powered Chevrolet Blazer will also begin in 2027, alongside several Cadillac models, including the LYRIQ and VISTIQ EVs, and the XT5.
While announcing the plan, Barra stated that the company is committed to building more vehicles on American soil and supporting American jobs. Although GM has been taking steps to boost domestic manufacturing, it has not explicitly mentioned shifting base of its foreign auto plants to the U.S. For instance, its gasoline-powered version of the Blazer is currently manufactured in Mexico, but GM plans to start producing it in Spring Hill, Tennessee. Additionally, a majority of its best-selling pickup truck, Silverado, is produced in Mexico and Canada, but GM has announced plans to scale up production at the Fort Wayne, Indiana plant. GM could use the vehicles produced outside the U.S. to supply to other markets.
The United Auto Workers union is certainly happy with GM’s announcement. UAW President Shawn Fain said in a statement. “It’s time to invest in blue collar America, and GM is showing how it’s done. This is just the beginning.”
Is GM a Good Stock to Buy?
On TipRanks, GM stock has a Moderate Buy consensus rating based on six Buys, three Holds, and one Sell rating. The average General Motors price target of $53.89 implies 10.1% upside potential from current levels. Year-to-date, GM stock has lost 7.6%.
