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On Wednesday, General Motors said it plans to increase its investments in electric and autonomous vehicles by 75% to $35 billion.
MYLES UDLAND: All right, let's take a look at shares of GM this morning, one of our Trending Tickers here on Yahoo Finance. Stock is up about 1 and 1/2 percent. The company out this morning, announcing that it will spend $35 billion on electric and autonomous vehicle investments through 2025. This is a 75% increase over the targeted investment the company was set to make in these areas, that investment announced before the pandemic.
And Brian Sozzi, this is just the latest salvo that we have seen from one of the big three automakers emphasizing their plans to spend money into this space. And it's always interesting, heartening, we might say, to see a stock up a little bit when a company comes out announcing major capex plans. But first we had Ford, and now GM following suit.
BRIAN SOZZI: Yeah. GM losing the PR battle in terms of electric vehicles. I would say the past month and a half, Ford has been out very aggressive. They said in May that they're going to spend $30 billion on their EV ambitions through 2025. We had Ford CEO Jim Farley on here, saying that the start to the new F-150 electric pickup truck has been very strong.
So GM out this morning, saying that they're probably going to spend $5 billion more than Ford through 2025. Only in auto land, sometimes you see this type of one-upmanship.
But I was on a call this morning with GM's CFO Paul Jacobson. And really, he was fielding a lot of questions. Where are you spending this additional $8 billion that you came up with over the past few months on EVs? Two important investments, they're building two new battery plants. So they'll start making their own batteries. It is reported that each plant will cost about $2 billion for GM to make. So a lot more investment in the capital to build out batteries to support its EV ambitions.
But completely lost in the shuffle here. And I think this is why you're seeing the stock go up, Myles. GM out with better than expected first half operating profit guidance. Now, interesting that GM did not raise its full-year EPS outlook, despite its better than expected second quarter, saying it pulled semiconductors in early so it could satisfy demand. But they said the outlook for the balance of the year, just in terms of semis, is complex. So they're remaining cautious for the rest of this year.
JULIE HYMAN: Yeah, go ahead, Myles.
MYLES UDLAND: I was just going to say, I think about these announcements too. And given our conversation with Austin Russell a few minutes back, and he's talking about what the future of electric and self-driving cars actually looks like. And he said, they're not building cars because building cars is extremely hard to do. And I think maybe just the positive reaction here that we've seen to Ford's announcements and GM's announcements is that the market trusts, though these are complex endeavors, these are companies that actually know how to get it done.
I think, as Sozzi mentioned with the F-150 electric, that likely to mainstream EVs in a bigger way. And now you've got GM talking about Hummers and one imagines Escalades to follow that are electric as well. Certainly will bring that more into the fore of the American consciousness.
JULIE HYMAN: I wonder how much lighter an electric Escalade would be, probably not that much lighter. But I don't know. We'll see.
BRIAN SOZZI: Heavier.
MYLES UDLAND: Are Teslas lighter? Like, is a Model 3 lighter than a BMW 5 Series?
JULIE HYMAN: I think so.
BRIAN SOZZI: Alexa, how heavy is a Tesla?
JULIE HYMAN: All right, we're going to have to do some further research.
MYLES UDLAND: I drive an ICE vehicle. So I don't know.