General Motors (GM) has announced that it is selling its share in an electric vehicle (EV) battery plant to LG Energy Solutions, its South Korean partner. The facility in Lansing, Michigan, is nearly complete and was being developed by Ultium Cells LLC, a joint venture between GM and LG.
Under the terms of the non-binding agreement revealed on Monday, LG will take full ownership of the plant and manage its operations. Once complete, the company plans to sell batteries produced at the facility to other manufacturers. According to the statement, GM will recover its US$1 billion investment in the project.
A shift in ownership
The Lansing plant is the latest in a series of battery factories established by GM and LG as they ramp up their EV production. The companies already operate joint battery plants in Warren, Ohio, and Spring Hill, Tennessee, producing batteries for GM’s Cadillac Lyriq and Chevrolet Equinox EVs.
Additionally, GM is working with Samsung SDI to develop another battery facility in New Carlisle, Indiana. Following the Lansing sale, GM’s US-owned battery plants will total three.
Paul Jacobson, GM’s chief financial officer, expressed optimism about the move, saying, “We believe we have the right cell and manufacturing capabilities to grow with the EV market in a capital-efficient manner. When completed, this transaction will also help LG Energy Solution meet demand by leveraging nearly ready capacity to come online, making GM even more efficient.”
EV profitability challenges
GM remains focused on making its EV business profitable, partly by mass-producing batteries domestically. By simplifying supply chains and capitalising on federal incentives introduced by the Biden administration, GM aims to compete with traditional gas-powered vehicles.
However, potential changes in government policy could disrupt these efforts. If re-elected, former President Donald Trump has pledged to eliminate EV subsidies, a move that could significantly impact GM’s long-term goals for its EV segment.
Despite the challenges, GM is advancing its plans. The automaker and LG announced the development of rectangular “prismatic” battery cells. These cells are designed to hold more energy than cylindrical cells, are more straightforward to manufacture, and are expected to improve overall production efficiency.
As the EV market grows, GM and LG are adapting to meet increasing demand while navigating the evolving industry landscape.