South Korea’s LG Energy Solution Ltd. plans to acquire General Motors Co.’s stake in their battery joint venture plant in Lansing, Michigan amid growing uncertainty over an EV uptake slowdown and Donald Trump’s return to the White House.
GM said on Monday that it has signed a non-binding agreement to sell its stake in the Ultium Cells LLC plant 3 to LG Energy, one of the world’s leading battery cell manufacturers.
Financial terms weren’t known, but GM expects to recoup about $1 billion in its investment in the facility, according to industry officials.
"We plan to acquire the Ultium Cells JV plant 3 in Lansing, Michigan, to effectively operate our US plants and maximize the Michigan plant's utilization rate," LG said in a statement.
GM said the deal is expected to close early next year.
The ownership structure of their other Ultium Cells JV plants – one in Ohio and another in Tennessee, will remain unchanged.
The largest US automaker said the plant 3, which is near completion, will serve an unidentified new customer.
TOYOTA LIKELY TO BECOME NEW CLIENT FOR PLANT 3
Although LG Energy didn’t reveal new customers for the battery cells from plant 3, industry watchers said Japan’s Toyota Motor Corp. is a strong candidate.
Last year, LG Energy and Toyota signed a battery supply agreement for an annual 20 gigawatt-hours (GWh) capacity.
The GM-LG announcement comes amid uncertainty about the future of EV battery production worldwide and consumer tax credits in the US.
President-elect Trump's transition team wants to eliminate the $7,500 consumer tax credit for EV purchases.
GM has been scaling back its EV plans amid a global EV uptake slowdown.
In June, the Detroit automaker cut its EV production forecast for 2024 and in July Chief Executive Mary Barra said GM would not produce 1 million EVs in North America by the end of 2025 "just because the market's not developing.”
In 2023, GM said it would delay production of electric pickup trucks at a Michigan plant by a year.
LG, GM TO EXTEND PARTNERSHIP TO PRISMATIC CELL DEVELOPMENT
Separately, GM and LG Energy said on Monday they are extending their 14-year battery technology partnership to include prismatic cell development.
Under the definitive agreement, the two companies will jointly develop prismatic battery cell technology, which, once developed, will power future GM EVs.
The rectangular cells can store more energy, reducing battery sizes and cutting weight and cost compared with the pouch cells GM now uses.
"LG Energy Solution is proud to be expanding its relationship with one of its strongest partners," said Suh Won-joon, executive vice president and head of the company's Advanced Automotive Battery division.
Kurt Kelty, GM vice president of battery cell and pack, said: “Together with LG Energy Solution, we've built Ultium Cells into one of the largest battery cell manufacturers in North America. We're focused on optimizing our battery technology by developing the right battery chemistries and form factors to improve EV performance, enhance safety and reduce costs.”
In August, GM finalized a separate deal with Korea's Samsung SDI Co. to produce prismatic cells at SDI’s battery factory in Indiana.
