General Motors demonstrated its new modular platform and battery system Ultium on March 4, 2020 at its Technology Center campus in Warren, Michigan.
Photo by Steve Fecht for General Motors
Detroit- General Motors The automaker announced on Monday that it plans to sell its stake in a $2.6 billion electric vehicle battery plant in Michigan to its joint venture partner LG Energy Solution.
The Detroit automaker said it expects to recoup its investment in the plant, which a source familiar with the plans said is expected to be about $1 billion. GM said the sale is part of a non-binding agreement between the two companies and is expected to close in the first quarter of next year.
The soon-to-be-completed 2.8 million-square-foot facility in Lansing, Miss., is expected to be the third battery factory for the joint venture, known as Ultium Cells LLC, following plants in Ohio and Tennessee that are already open and operational. .
The Lansing facility was announced in January 2022, and the two companies first announced the joint venture five years ago.
GM’s move comes as the automaker tries to right-scale production of electric vehicles and faces lower-than-expected consumer demand. At the same time, there is uncertainty over federal incentives for building and buying electric vehicles under President-elect Donald Trump.
The automaker said the sale would not affect its overall ownership in the joint venture or its future plans to establish a separate joint venture factory with LGES rival Samsung SDI.
General Motors CEO and Chairman Mary Barra and LG Chem Vice Chairman and CEO Hak-Cheol Shin at the automaker’s battery laboratory in Warren, Miss., on December 5, 2019, when the companies announced the formation of a value-added $2.6 billion in new joint ventures.
General Motors
“We believe we have the right battery and manufacturing capabilities to grow with the electric vehicle market in a capital-efficient manner,” GM Chief Financial Officer Paul Jacobson said in a release. “When completed, This transaction will also help LG Energy Solution meet demand and make GM more efficient by leveraging capacity that is almost ready to come online.”
GM said Korean battery suppliers will have immediate access to the Lansing plant to begin installing equipment. The factory currently employs nearly 100 people. Expected to start operations By the end of this year.
In addition to selling its stake in the Lansing plant, General Motors announced Monday it would extend a 14-year battery technology partnership with LGES that includes the development of an emerging battery type called prismatic cells.
Prismatic cells have a flat, rectangular shape with a rigid casing that allows for space-saving packaging within battery modules and packs. GM said the batteries are expected to reduce the weight and cost of electric vehicles while simplifying manufacturing by reducing the number of modules and mechanical parts.
“We are committed to optimizing our battery technology by developing the right battery chemistries and form factors to improve electric vehicle performance, enhance safety and reduce costs. By expanding our partnership with LG Energy Solution, we are moving towards This is a significant step toward these goals,” Kurt Kelty, GM’s vice president of cells and battery packs, said in a press release.
GM has previously said it plans to expand its battery technology from flat “Ultium” pouches to other forms such as prismatic cells.
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