General Motors (GM) announced on Tuesday that it will invest $888 million in its Tonawanda propulsion plant in Buffalo, New York.
The investment aims to boost engine production and develop the next generation of V8 engines. This marks a significant increase from the company’s earlier $300 million plan to produce electric vehicle (EV) drive units at the same plant.
The shift reflects changes in the automotive market, where demand for EVs has grown more slowly than expected. GM has also been active in lobbying Congress to roll back California’s strict EV regulations.
The new investment will support the production of GM’s sixth-generation V8 engines. These engines will power full-size trucks and SUVs and are designed to be more fuel-efficient.
New York Governor Kathy Hochul said the project will help preserve 870 jobs at the Tonawanda plant, including 177 jobs that were previously at risk. The state is offering up to $16.96 million in tax credits to support the investment.
Last week, New York announced a two-year pause on penalties for any shortfalls in EV sales, signaling flexibility in the state’s EV policies.
While GM remains committed to its goal of selling only electric light-duty vehicles by 2035, CEO Mary Barra emphasized the company will stay responsive to customer preferences. GM currently offers about a dozen EV models in the U.S. and continues to adapt its strategy based on market demand.
GM’s initial $300 million investment for EV drive unit production at Tonawanda, agreed upon during 2023 union negotiations, had not yet resulted in production before this new announcement.
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