GM delays EV pickup expansion due to 'evolving EV demand'

GM (GM) on Tuesday said it was delaying its electric pickup truck expansion, following in the footsteps of its crosstown rival Ford (F) as it seems demand for EVs in the truck segment may not be as strong as originally thought.

In a statement, GM confirmed that it will “re-time” the conversion of its Orion Assembly plant in Michigan, which was supposed to be repurposed for the production of the Chevrolet Silverado EV and GMC Sierra EV. Instead of targeting a late 2024 production date, GM said it would push production to late 2025 in order to “better manage capital investment while aligning with evolving EV demand.”

Last year GM said it would spend $4 billion to convert the Orion Assembly plant for EV truck production using the automaker’s Ultium platform. Currently, Orion builds the Chevrolet Bolt E and EUV, which is still scheduled to end production at the end of 2023, GM said.

GM’s United Auto Worker (UAW) employees impacted by the delayed plant conversion will be offered other opportunities in Michigan, the automaker said, including at GM’s Factory ZERO EV assembly plant that currently builds the GMC Hummer EV Pickup and SUV, Chevrolet Silverado EV, and Cruise Origin autonomous vehicle; the Sierra EV will be assembled at Factory ZERO next year. The UAW's ongoing stand-up strikes have not affected GM's Factory ZERO operations, at least so far.

GM’s move to delay Orion’s conversion follows Ford’s decision to cut a shift at its F-150 Lightning EV pickup plant in Detroit, implying demand was drying up for the Lightning. The Wall Street Journal was first to report last Friday that Ford was considering cutting a shift at its Rouge electric vehicle plant, where the automaker builds the Lightning, citing a memo from a UAW official concerned about demand. “It doesn’t take a rocket scientist to figure out that our sales for the Lightning have tanked,” the memo reportedly also said.

"We think Ford’s announcement is emblematic of the difficulties traditional automakers have faced with ramping up EV production, but also reflects consumer demand for EVs that wasn’t what it once appeared to be in terms of the robust reservation counts for certain new models,” CFRA analyst Garrett Nelson said to Yahoo Finance regarding the shift cut.

GM has committed to spend $35 billion by 2025 for its electrification plans, with a goal of being all-electric by 2035. With the automaker admitting “evolving EV demand” has led it to delay its EV expansion plans, it seems the evolution to an EV truck future in the US is going to happen much later than many in the industry had originally predicted.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance