General Motors is investing $888 million into its Tonawanda Propulsion Plant in Buffalo, New York, to increase production of its next-generation V8 engine, marking a significant shift away from previously announced plans to build electric vehicle (EV) drive units at the facility.
The investment, first reported by Reuters, supersedes GM’s earlier $300 million pledge made during 2023 contract negotiations with the United Auto Workers union, which aimed to launch EV drive unit production at the plant—a plan that has yet to materialize.
This strategic pivot reflects broader industry adjustments to slower-than-anticipated EV adoption, even as GM maintains its official goal to sell only electric light-duty vehicles by 2035. The company has emphasized it will remain “responsive to where the customer is,” signaling a more flexible approach amid evolving market dynamics.
The Tonawanda plant will support production of GM’s sixth-generation V8 engine, designed for full-size trucks and SUVs. GM says the engine will offer improved fuel efficiency and performance, incorporating the latest in combustion and thermal management technologies.
New York Governor Kathy Hochul announced that the project will support 870 jobs at the facility, including protecting 177 jobs at risk. The state is offering up to $16.96 million in tax credits as part of its investment incentive package.
In a broader context, New York has also signaled some policy flexibility in response to EV market realities, recently announcing a two-year pause on penalties for EV sales shortfalls under its clean vehicle mandate.
Though GM has continued expanding its EV lineup—now offering around a dozen electric models in the U.S.—the automaker has also scaled back certain electrification initiatives. Most notably, it recently sold its stake in a battery cell manufacturing plant co-developed with LG Energy, marking a recalibration of its EV supply chain strategy.
GM CEO Mary Barra reaffirmed the company’s long-term commitment to EVs, but noted that GM is focusing on aligning production with consumer demand: “We’re committed to an electric future, but we’re also listening to our customers.”
With the Tonawanda investment, GM is reinforcing its commitment to high-performance internal combustion engines even as it charts a path toward electrification—balancing innovation with pragmatism in a complex, shifting auto market.