General Motors is planning to invest $4 billion in US manufacturing to expand vehicle production. The decision intends to reduce reliance on imported vehicles to counter tariffs and create jobs inside the US.
The investment could help GM’s manufacturing capacity domestically and moving its production models from Mexico to the US.
Expansion in US Manufacturing
GM’s $4 billion investment could improve production in 3 assembly plants in the US, which could enable the automaker to produce over two million cars annually in the US by 2027. ⁽¹⁾
The Chevrolet Blazer, currently built in Mexico, will move to GM’s Spring Hill Assembly plant in Tennessee starting in 2027. The battery-powered Blazer however, will continue to be produced in Mexico. ⁽²⁾
Starting in mid-2027, the Fairfax Assembly plant in Kansas City will begin producing the gas-powered Chevrolet Equinox. This will be in addition to the existing production in Mexico, which will continue supplying other markets. ⁽³⁾
The Orion Assembly plant in Michigan, originally planned for electric truck production, will now manufacture gas-powered trucks and SUVs starting in 2027. Electric trucks will instead be built at GM’s dedicated EV plant near Detroit. ⁽⁴⁾
With these plans, GM aims to shift its production and support domestic growth, ultimately reducing tariff costs and creating more jobs.
“We believe the future of transportation will be driven by American innovation and manufacturing expertise,” said GM CEO Mary Barra said in a statement. “Today’s announcement demonstrates our ongoing commitment to build vehicles in the US and to support American jobs. We’re focused on giving customers choice and offering a broad range of vehicles they love.”
Responding to Tariffs
The $4 billion investment was planned as GM faces a 25% tariff on imported auto parts and vehicles, which was set in motion by President Trump back in April.
GM could face up to $5 billion in costs due to tariffs, given that nearly half the vehicles it sells in the US are made in foreign plants. By shifting production to the US, GM is looking to reduce costs by 30% to 50%. ⁽⁵⁾
CEO Barra has been supportive of the tariffs, noting that foreign subsidies and taxes disadvantage US automakers globally. At a recent investor event, GM CFO Paul Jacobson expressed optimism about reducing tariff impacts through trade deals and cost-saving measures. The production shifts are seen as a win for Trump’s policies, which prioritize domestic manufacturing.
Pulling Back on Electric Vehicles
The announcement also marks the latest pullback on EVs from a company that once set an ambitious agenda for a transition to battery-powered vehicles. The Michigan plant and Tonawanda plant will now be focusing on gas-powered vehicles after scrapping plans on producing EVs. ⁽⁶⁾
While GM halted Bolt production in 2023 due to battery fires and declining sales, the Fairfax plant will produce an updated Bolt EV alongside the Equinox starting in 2027. ⁽⁷⁾
Despite these adjustments, GM insists its EV business is growing in the US. The company is balancing its portfolio to offer both gas-powered and electric vehicles, giving customers more choices.
Financial Outlook
GM’s capital expenditure could increase to $10-12 billion in 2026 and 2027. This indicates the automaker is committed to renovating plants and boosting US production. GM has been assessing tariff and regulation impacts to support its US operations. ⁽⁸⁾
Barra emphasized GM’s resilience, stating that the company is seizing opportunities to strengthen its business. The focus on popular gas-powered models like the Blazer and Equinox, alongside selective EV investments, aligns with customer demand and market realities.
