General Motors announced plans to invest $888 million into its Tonawanda propulsion plant in Buffalo, New York, to ramp up production of a new generation of V8 engines. The investment marks a significant shift from the company’s earlier $300 million pledge to produce electric vehicle (EV) drive units at the same facility.
The decision highlights a broader industry trend of automakers adjusting to weaker-than-anticipated demand for EVs. It also follows GM’s push to influence federal policy, including efforts to overturn California’s strict EV mandates.
The new funding will support production of GM’s sixth-generation V8 engines, which will power full-size trucks and SUVs with improved fuel efficiency.
New York Governor Kathy Hochul stated the project will help sustain 870 jobs at the plant, including 177 considered at risk. In exchange, the state is offering up to $16.96 million in tax credits based on GM’s investment commitment.
Last week, New York also announced a two-year delay on penalties for EV sales shortfalls, underscoring the challenges facing the EV market.
Although GM remains committed to a long-term EV transition—with a goal to sell only electric light-duty vehicles by 2035—the company has recently slowed some EV-related investments. This includes the sale of its stake in a battery cell joint venture with LG Energy.
GM currently offers about a dozen EV models in the U.S. but is emphasizing a flexible approach, saying it will adjust based on customer demand.
The original $300 million EV investment at Tonawanda was made during 2023 negotiations with the United Auto Workers union but drive unit production had not yet started.
Earlier this month the company informed its employees and dealers involved in its China export operations that it will no longer ship vehicles from the United States to China. This decision comes amid ongoing trade and tariff negotiations between the United States and China.
GM had been exporting vehicles to China under its premium import brand, The Durant Guild, which made up less than 0.1% of its total sales in the country, according to a company spokesperson. Citing significant changes in economic conditions, GM has now decided to restructure the brand and streamline its operations in China.
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