New manufacturing plants

General Motors will increase its spending on electric cars, following a similar move by rival Ford, and also plans to open two new battery plants, Reuters reports. GM is counting on the US government to help finance and renew tax breaks for the purchase of its electric vehicles.

General Motors (GM) plans to boost spending on its electric and autonomous vehicles to $35 billion by 2025, up 30% from its previous forecast, anonymous sources told Reuters.

In April, GM announced plans to invest $27 billion over the next five years to reach the milestone of producing 1 million of its own electric vehicles.

Mark Reuss confirmed in an interview with The Associated Press that the company plans to build two new battery plants in the US, each expected to cost more than $2bn.

GM has previously said it will aim to make a full transition to electric car production by 2035.

Less than a month ago, GM's rival Ford (F) also announced it would increase its investment in electrification to more than $30 billion by 2025, as the automaker plans to reach a 40% share of electric car sales by 2030.

In the European electric car market, General Motors and Ford will compete with both Tesla and European companies as well as Chinese manufacturers who have voiced their plans to "expand" the European market.

To implement such ambitious long-term plans, General Motors will seek government support.

Biden's infrastructure plan, which is on the table in Congress, calls for a $174bn funding programme for the electric car market that includes a 30% tax rebate for manufacturers to convert plants to electric vehicles or build new battery manufacturing plants. GM is also reportedly counting on a renewal of tax credits for the purchase of its electric vehicles, as the company has lost its current $7500 tax credit.

Last month, the US Senate Finance Committee put forward legislation that would repeal previous restrictions and raise the tax credit to $12500 for purchases of electric cars under $80,000 made in the US by unionized workers.

Under the current version of the law, buyers of electric cars from General Motors, whose plants are located in the US and whose employees are union members, would be eligible for the largest tax credit of $12500.