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DETROIT — General Motors (GM) has announced plans to divest its interest in a $2.6 billion electric vehicle (EV) battery cell manufacturing plant located in Michigan, transferring its stake to partner LG Energy Solution. This decision was made public on Monday, with GM indicating that it anticipates recouping approximately $1 billion from the sale.
The arrangement between GM and LG Energy Solutions is based on a nonbinding agreement that is expected to finalize in the first quarter of the upcoming year. The Lansing facility, which spans 2.8 million square feet, is nearing completion and would have been the third battery cell facility established under their joint venture, Ultium Cells LLC, following operational plants in Ohio and Tennessee.
This plant was initially announced in January 2022, adding to a partnership that dates back five years. GM’s strategic move comes as the company seeks to recalibrate its EV production in response to slower-than-anticipated consumer interest. Additionally, the backdrop of shifting federal incentives for EV manufacturing and acquisition under the Biden administration adds a layer of complexity to GM’s decision.
The automaker clarified that this sale will not impact its overall stake in the joint venture or its future endeavors with another battery partner, Samsung SDI. GM’s CEO, Mary Barra, alongside LG Chem’s Vice Chairman, Hak-Cheol Shin, formally unveiled their partnership in December 2019 at GM’s battery lab in Warren, Michigan, highlighting their commitment to EV development.
GM Chief Financial Officer Paul Jacobson stated, “We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital-efficient manner. This transaction will also assist LG Energy Solution in meeting demand and will enhance GM’s operational efficiency.”
Following the completion of the sale, LG Energy Solution is set to gain immediate access to the Lansing facility, where it can commence equipment installation. Currently, the plant has a workforce of nearly 100 employees and is projected to start operations by the end of this year, according to GM’s forecasts.
In addition to the plant sale, GM has opted to prolong its 14-year collaboration with LG Energy Solution to advance the development of prismatic battery cells. These cells, characterized by their flat, rectangular shape and robust enclosure, promise to offer more efficient space usage within battery modules and packs. GM anticipates that prismatic cells will contribute to reduced weight and costs for EVs, simultaneously streamlining production by minimizing the necessary number of modules and components.
Kurt Kelty, GM’s vice president of battery cell and pack, emphasized the importance of enhancing battery technology through various chemistries and designs to boost EV performance, safety, and affordability. He noted, “By expanding our partnership with LG Energy Solution, we’re making significant strides towards these objectives.”
Previously, GM had articulated plans to broaden its battery technology offerings beyond its traditional flat “Ultium” pouch cells to embrace alternative formats, including prismatic designs.
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