GM to sell stake in Michigan battery plant to LG Energy solution
GM to sell stake in Michigan battery plant to LG Energy solution
General Motors (GM) said Monday it will sell its stake in a nearly finished battery plant in Lansing, Michigan, to LG Energy Solution, its partner. GM’s move reflects its ongoing market recalibration of the electric vehicle (EV) strategy.
The deal is expected to close early next year, allowing GM to recoup its USD 1 billion investment in the facility. GM's ownership stake in the Ultium Cells joint venture will not be affected by the sale, comprised of battery plants being built in Ohio and Tennessee.
Under LG Energy Solution's management, the Lansing plant currently with close to 100 workers will supply a new, undisclosed customer. The facility is on track to fulfill its employment commitments, GM stated.
“Our belief is that we have the right cell and cell manufacturing capabilities in place to be able to grow with the EV market in a capital efficient way.”
LG Energy Solution said it reviewed the acquisition as part of the goal of increasing investment efficiency, and maximising plant operating rates in its North American plants.
The development occurs while the EV production incentives and market dynamics are hardly certain. The USD 7,500 federal EV tax credit is something the reports say President-elect Donald Trump’s transition team is considering doing away with, adding to the uncertainty that will face EV adoption.
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Over the past year, GM has been scaling back its EV ambitions. The automaker later scaled back its EV production forecast for 2024 and in July, CEO Mary Barra said the company would miss its goal of manufacturing 1 million EVs in North America by 2025 because growth of the market has been slower than expected.
But the automaker is also extending its long-standing partnership with LG Energy Solution to build prismatic battery cells that could help reduce EV costs and weight. Additionally, GM finalised a separate agreement with Samsung SDI in August to establish a prismatic battery factory in Indiana.
These moves underline GM's efforts to adjust its EV roadmap while balancing operational costs and evolving market demands.
