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WSJ News Exclusive | GM Plans More Than $3 Billion for Electric-Vehicle Projects in

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General Motors Co.


GM 6.02%

plans to invest more than $3 billion to make electric vehicles in Michigan, people familiar with the matter said, a potential win for the car maker’s home state after recent commitments of auto projects to Southern states.

GM is finalizing plans for two electric-vehicle projects in Michigan. One would convert its Orion Assembly plant in suburban Detroit to serve as its hub for production of electric pickup trucks, the people with knowledge of the plans said. The renovation would cost at least $2 billion and would be expected to create more than 1,500 jobs at the factory, which today is lightly used, the people said.

Also, the auto maker intends to build a battery-cell factory near one of its assembly plants in Lansing, Mich., the people said. That project, involving a 50-50 joint venture between GM and its battery partner, LG Energy Solutions, would split more than $2 billion between GM and LG and create around 1,200 jobs, the people said.

GM officials are in talks with local governments to secure tax abatements and other approvals for the projects, and the plans could fall through or be altered, the people said.

“GM is in the initial stages of developing a business case for a potential future investment at several locations, including the Orion Township area,” the Detroit-based company said in a statement Friday. “We are having discussions with the appropriate local officials on potential incentive opportunities.”

GM shares rose about 6% Friday, closing at $63.21.

Auto makers are rushing to secure future battery supplies as the industry prepares to roll out dozens of new plug-in models over the next few years. Electric vehicles accounted for only about 4% of U.S. vehicle sales this year through November, and about 8% of global sales, according to an investor note Friday from

Credit Suisse.

But sales are growing rapidly as auto makers introduce new models and governments around the world tighten restrictions on tailpipe emissions. Credit Suisse said it now expects electrics to account for 24% of new-vehicle sales globally by 2025, up from a previous forecast of 17%.

Toyota Motor Corp.

plans to spend $1.25 billion on a new battery plant in rural North Carolina, according to a public-incentives deal approved Monday.

Ford

Motor Co. in September said it would invest more than $11 billion to build three battery plants, two in Kentucky and one in Tennessee, near Memphis, along with an electric-truck plant, its first new U.S. assembly plant in decades.

The planned GM investments would be notable for Michigan, especially after

Gov. Gretchen Whitmer

expressed disappointment that the state wasn’t selected for Ford’s projects. Her office declined to comment on potential future projects.

General Motors plans to phase out nearly all of its gas and diesel vehicles by 2035. Leading that transition is the first fully electric Cadillac. WSJ’s Mike Colias visited a GM testing site for a ride and an exclusive interview with GM’s President Mark L. Reuss. Photo Illustration: Alexander Hotz

Much of the recent surge in electric-vehicle investment has gone to Southern and Western states, shifting the center of gravity away from the auto industry’s traditional stronghold in the Upper Midwest.

In addition to Toyota and Ford’s recent moves,

Volkswagen AG

has ramped up electric-vehicle production at its factory in Chattanooga, Tenn. Polestar, the electric-vehicle company owned by Chinese car maker Zhejiang Geely Holding Group Co., is making cars in South Carolina. Tesla has said it aims to begin producing vehicles at its new factory in the Austin, Texas, area by the end of the year.

Some high-profile electric-vehicle startups also are based outside the Midwest, including

Lucid Group Inc.,

which recently began making cars at its factory in Arizona.

GM’s investment would be part of its $35 billion spending spree on electric and autonomous vehicles through 2025. The auto maker has said it eventually wants to surpass market-leader Tesla in U.S. sales of electrics.

The battery factory planned for Michigan would be the third for GM’s joint venture with Korea’s LG. The joint-venture company has looked outside GM’s home state for the other factories: one in Ohio, set to open next year, and another under way in Tennessee.

GM, which has long had excess factory space in the U.S., plans to convert existing plants to build electrics instead of gas- or diesel-powered cars, though in some cases it will make both in the same facility, executives have said. The company has said it will save at least $10 billion through 2030 by revamping factories rather than building new ones.

“We can leverage and go faster because of the existing [factory] footprint that we have,” GM Chief Executive

Mary Barra

said Thursday during an event hosted by the Automotive Press Association.

Ford, which has less unused factory space in the U.S. than does GM, is taking a different approach with its plans to build electric-vehicle facilities from scratch.

It is building the factory near Memphis on a massive site that also will house a battery plant. It also recently built a smaller plant near its Dearborn, Mich., headquarters to make electric F-150 pickup trucks.

Write to Mike Colias at Mike.Colias@wsj.com

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