A U.S. auto plant that once made giant gas-guzzlers will now make cars that don’t need gas at all.
AM General, which previously built the Hummer H2, sold its factory in South Bend, Indiana to the electric carmaker SF Motors, both firms announced Thursday.
SF Motors will pay $110 million to produce “intelligent electric vehicles,” according to publicly available filings. It will spend another $30 million to upgrade the 700,000-square-foot commercial assembly plant.
The company didn’t elaborate further on its plans for the factory, such as how many cars it will produce annually or what types of smart driving or electric-powertrain technologies they’ll use. But executives said the arrangement will preserve about 430 U.S. auto worker jobs that were at risk of disappearing.
SF Motors is a young division of Chongqing Sokon Industry Group, a major Chinese manufacturer of motorcycles and commercial vehicles that’s expanding into the U.S. electric car market. SF Motors officially launched earlier this month with a new headquarters in Silicon Valley.
The division has hired several former engineers from the leading electric automaker Tesla, Electrek reported. Tesla cofounder and original CEO Martin Eberhard is also reportedly a consultant for SF Motors, according to the news site.
SF Motors’ move into Indiana is a pretty poignant symbol of the clean energy transformation: a plant that once produced beastly sport-utility vehicles will now churn out cars with virtually no tailpipe emissions. A Kentucky coal mining museum sparked a similar narrative this spring when it installed solar panels on the building’s rooftop.
The deal with AM General also arrives as sales of electric vehicles are surging in the U.S. and globally.
About 2 million plug-in hybrid and battery-powered vehicles were on the roads worldwide in 2016, a 60-percent jump from the year before, the International Energy Agency reported this month.
While that’s still only 0.2 percent of total light-duty vehicles globally, the agency said it expects sales to keep climbing as car battery prices plunge and governments adopt policies to fight climate change.
Transportation comprises about one-fifth of total greenhouse gas emissions, mainly through the burning of petroleum fuels.
AM General originally built the South Bend plant in 2002 to make the Hummer H2, a civilian version of the Humvee (High Mobility Multipurpose Wheeled Vehicle) sold by General Motors. The company produced the H2 under contract to GM until January 2009.
The Indiana company said the sale will not affect its military assembly plant, where it supports and upgrades hundreds of thousands of Humvees still serving the U.S. armed forces.