plans announced late last year. It also said it is raising its earnings guidance for the first half of the year.
The additional money will be used to expand its rollout of EVs and accelerate production of its battery and fuel cell technologies, including two new U.S. battery plants in addition to two under construction, by 2025.
America’s largest automaker is racing to catch up to EV leader Tesla and compete for a leadership position against other well-established automakers such as Volkswagen. GM plans to sell more than 1 million EVs annually by 2025.
“There are several growth engines in General Motors, and we’re going to just keep pushing ahead and accelerating them like we’re doing today of announcing a faster pivot to EVs,” CEO Mary Barra said Wednesday on CNBC’s “Squawk on the Street.” “I really see long-term value creation for General Motors and for our shareholders.”
GM’s plans to expand its electric and autonomous vehicle lineup and technology have been praised by Wall Street. Its stock has almost tripled since reaching a 12-month low of $23.33 last July. Shares were up by as much as 4% during trading early Wednesday morning to about $63 a share.
GM said the new investments are enabled by its strong underlying business, including record pretax earnings over the last three quarters and strong demand for its upcoming EVs.
“Across the board, we are seeing exceptionally strong reactions and positive response to all of our electric vehicles,” Barra said.
CFO Paul Jacobson said GM projects better-than-expected results in the second quarter despite a global semiconductor chip shortage that’s impacting the industry. He said GM expects adjusted pretax earnings of $8.5 billion to $9.5 billion during the first half of the year, up from an estimated $5.5 billion.
For the year, GM previously said it expected pretax profits “at the higher end” of a $10 billion to $11 billion range. It didn’t provide an update on its full-year earnings.
“We remain cautious about the full year, and we’ll have more information about the full-year guidance on our earnings call on Aug. 4,” Jacobson told reporters during a call Wednesday.
GM’s increased spending plans come less than a month after crosstown rival Ford Motor increased its EV spending to more than $30 billion by 2025. But Ford’s investments date to 2016, while GM’s are for 2020 through 2025.
