General Motors Co.'s $4 billion reshoring plan announced this week sketches a blueprint for the Detroit automaker's long-term strategy: ramp up production of the hulking gas-powered vehicles Americans love while growing its expanding fleet of electric vehicles.

The investment to shift production of popular models from Mexico to three U.S. plants is the latest instance of GM tapping the brakes on EVs in response to slower-than-expected growth amid tariffs and federal efforts to scale back emissions regulations and EV incentives.

GM's latest vision for the Orion Assembly Plant, unveiled Tuesday as part of the $4 billion reshoring announcement, represents the company's biggest pullback on electrification yet. Instead of producing EV trucks as previously announced, the Oakland County facility will build gas-powered large SUVs and pickups starting in 2027.

"We had planned for that to be a big EV plant," GM Chief Financial Officer Paul Jacobson said in a Wednesday investor call. "We were thinking about rapid expansion of electric vehicles, and clearly we haven't seen that happen. So as we look at that capacity (and) we look at the landscape where we are in pivoting that to full-size truck production as well as incremental full-size SUV production, it's going to help create and satisfy the demand that we've already seen in the marketplace for our industry-leading products."

GM is following a dual track with EVs and ICEs, necessitated in part by slow consumer acceptance of battery-powered models. But its profit-rich trucks and SUVs generate the cash GM needs to fund its EV and battery aspirations.

"Ten years ago, all the manufacturers saw the success of Tesla and expected the market to shift towards electric vehicles, and so they prepared for this new wave of buyers," said Sam Fiorani, vice president of the research firm AutoForecast Solutions. "That shift was never going to happen. And there was going to be an extended period where gas engines were required to keep their volumes up, to keep sales, (and) to keep customers happy."

GM's decision to walk away from its $4 billion plan to convert Orion to EV production, announced in 2022, is the automaker's latest move to slow its shift to electrification — and recognize shifting consumer preferences and the prevailing political sentiment of the second Trump era.

Plans to make Tonawanda Propulsion all EV were tossed in May in favor of manufacturing the latest V-8, gas-powered engines at the Buffalo, New York, plant. In April, GM announced plans to beef up capacity at a Toledo plant to build transmissions for gas-powered trucks while pulling out some equipment that had been installed recently to make drive systems for electric vehicles.

"What we’re about is offering customers choice," CEO Mary Barra told Fox Business last month. "We have great internal combustion engines, or gas vehicles. We have great EV vehicles. We’re meeting the customer in the marketplace where they are.

"We have such a customer-focused portfolio of gas-powered vehicles or electric vehicles," she added. "We’re growing both."

Trucks, SUVs and the draw of V-8s

As lawmakers and policymakers pushed for increasing regulations on fuel efficiency, emissions and other environmentally friendly rules, Fiorani said some drivers responded with renewed interest in size and power.

“Since the 80s, we’ve seen this need to make more efficient vehicles," Fiorani said. "And buyers have pushed back by attempting to buy the largest, most powerful, the loudest engine they could."

Ram learned to appreciate customers' devotion to V-8s the hard way, Fiorani said, after dropping its famed 5.7-liter Hemi V-8 from its 1500 lineup and replacing it with six-cylinder engines in 2025. Outrage ensued, and Ram sales overall plummeted 19% last year.

Ram "screwed up" when it dropped the engine, Stellantis NV truck brand CEO Tim Kuniskis said last week when announcing the Hemi's return to the 2026 Ram 1500 lineup.

GM's top-selling vehicles in the first three months of 2025 included the Chevy Silverado and GMC Sierra trucks, the latter of which has an option for a V-8 engine. Those are "high-volume, high-margin vehicles," said Stephanie Valdez Streaty, director of Industry Insights for Cox Automotive.

Fiorani added: “Buyers expect to have a large truck and a powerful engine under the hood, and part of that experience is the noise that a V-8 makes. It announces that, this is what I own, and this is what I drive."

Under GM's $4 billion reshoring plan, the company will produce full-size SUVs and light-duty pickups in Orion; build the gas-powered Equinox compact SUV in Fairfax, Kansas; and assemble the gas-powered Blazer in Spring Hill, Tennessee.

"Talking about trucks and SUVs compared to the small cars we were into, everybody's excited," said Gerald Lang, president of United Auto Workers Local 5960 at GM Lake Orion. "There's a lot of people that had to transfer out with this retooling that are looking forward to coming home."

Easing GM's way are dirt-cheap gas prices that give drivers little incentive to ditch gas guzzlers.

“Making sure they have all these options for the consumer is the best recipe for success in the next decade or more," Fiorani said. "And GM is finally realizing that the electric market isn’t going to be here tomorrow, and buyers are going to expect to have a V-8-powered pickup truck."

Electrification

Despite low margins, analysts say GM must continue to invest in EVs to be competitive in the upcoming decades, particularly against intensifying competition from Chinese rivals.

GM trails industry leader Tesla Inc. But the Detroit automaker is gaining traction as buyers grow tired of dated models and CEO Elon Musk's politics.

GM on Tuesday announced it claimed a distant second place in U.S. EV sales through May. Part of the draw is the wide variety of EVs offered under the Cadillac, GMC and Chevrolet brands, including the affordable Chevrolet Equinox and Blazer. The EV models of both the Equinox and Blazer — as well as the luxury Cadillac Optiq — are made in Mexico.

Equinox and Blazer accounted for some 50% of GM's EV sales, with roughly 22,000 and 11,000 sold through May, respectively. Altogether, GM currently fields 11 EV models, including the hand-built Celestiq.

Aiding recent sales overall is buyer anxiety that Trump's tariffs would lead to price hikes. EV drivers also face the threat of Congress axing the $7,500 tax incentives and cancelling federal support to expand the nation's charging network.

The Republican president enacted a 25% tariff on all imported vehicles and auto parts from Canada and Mexico that do not comply with the countries' U.S.-Mexico-Canada free trade agreement.

He granted the USMCA exemption after intense lobbying and direct conversations with leaders of the Detroit Three automakers. The companies warned of dire consequences from disrupting North America's highly interconnected automotive supply chain, with Michigan likely to suffer the most.

“All of these factors are weighing on the decision-making of buyers today," Fiorani said. "If they believe that they're going to need a vehicle in the next few months, a lot of them have moved to the dealership now to purchase while they believe the prices will be lower."

Jacobson said GM does not expect the April and May spikes, thanks to pull-ahead vehicle sales in both gas and electric models, to continue through June.

"We've certainly seen that come back down," Jacobson said. "The question out of earnings is going to be: how far does that come down?"

Despite growth, EV sales have not met automakers' optimistic expectations. All-electric vehicle purchases still hover around 10% of the U.S. car market, forcing GM to retreat from a short-lived promise for a fully electric fleet by 2035.

"The industry is still committed," Valdez Streaty said. "There's just going to be shifts in the timeline."

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