General Motors (GM) announced plans to expand its battery production capabilities in the U.S. while at the same time extending shutdowns of three of its manufacturing plants.

On Wednesday, GM said it would extend temporary shutdowns at three of its North American plants due to a global semiconductor chip shortage. The shutdowns are expected to have a major impact on GM’s earnings during 2021, with the company announcing that it expects its earnings will be cut by $1.5 billion to $2 billion.

“GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs for our customers. GM has not taken downtime or reduced shifts at any of its truck plants due to the shortage,” the company said in a statement.

The chip shortage impacts the auto industry’s entire supply chain — from dealers and automakers to large tier-1 suppliers and their smaller counterparts. The shortage is expected to cut $60.6 billion in revenue from the global automotive industry this year.

GM’s plants were initially expected to reopen mid-March, but the extension of the closure reflects the unexpected demand increase for vehicles. Suppliers for auto parts warned of the shortage late last year when demand for vehicles rebounded stronger than expected after automakers were forced to shut down production last spring to help contain the coronavirus pandemic.

Semiconductor chips are essential components of newly manufactured vehicles. The chips impact vehicles’ infotainment systems and features like power steering and brakes.

While extending the plant shutdowns, GM confirmed it is looking to build a second battery-cell plant. The company said it would choose a location in the first half of this year.

The battery plant is a joint venture with LG, which is already building a $2.3 billion battery plant in northeast Ohio that is expected to open next year. That plant will eventually supply enough batteries to power hundreds of thousands of vehicles annually.

People familiar with the matter say that GM and LG are close to completing a decision to locate the plant in Tennessee and that this new plant will be a similar-sized investment to the one in Ohio.

The building of battery plants is the lynchpin in GM’s plan to make its next-generation electric vehicles profitable. GM is expected to release 20 new or redesigned electric cars as part of its $27 billion investment plan from 2020 through 2025.

The semiconductor shortage showcases the need to fortify the supply chain for crucial components to GM’s vehicles. Other companies, like Ford, have recognized the need to tighten the supply chain as well.

“We need to bring battery production to the U.S. We can’t go through what we’re doing with chips right now in Taiwan. It’s just important,” Ford CEO Jim Farley said last month during a Wolfe Research conference.