On January 25th, the tech giant General Motors revealed it's plans to spend an astronomical $7 Billion on the production of electric vehicles in Michigan. With the increase in global temperatures due to carbon emissions, many companies are trying to capitalize on the market of green energy.
General Motors has recently been in a heated rivalry with fellow automobile company, Ford Motor Co. over EV (electric vehicles) supremacy in North America. Both companies are in competition with the current number 1, Tesla, which is currently predicted to sell over 1 million EVs by the end of 2022. General Motors said it will have the annual capacity to produce over 600,000 EVs by the end of 2024 in it's Detroit-Hamtramck and Orion Township plants, with another 3 plants located in Tennessee boosting it's output to over 1 million units by the end of 2025. GM's main rival, Ford, has said it will have the capacity to build 600,000 EVs within 24 months, becoming the number 2 EV producer in North America.
What does this mean?
How will this affect the business landscape, you may ask? Well, because Michigan previously lost an $11 billion investment from Ford (with the money instead going into Kentucky and Tennessee), this is a huge win, creating thousands of jobs and increasing Michigan exports. With the increasing need for green energy solutions, this investment will also increase the supply of EVs across the United States and the rest of North America.
Key Concepts Recap
Annual Production Capacity
The sum of average capacity at the start of the year and average annual capacity of equipment during the year of purchase of equipment after reducing the average annual capacity of equipment during the year.
Energy from sources that are naturally replenishing but flow-limited.