General Motors unveiled its all-new modular platform and battery system, Ultium, on March 4, 2020 at the Tech Center campus in Warren, Michigan.
Photo by Steve Fecht for General Motors
DETROIT- General engines plans to sell its stake in a $2.6 billion electric vehicle battery cell factory in Michigan to its joint venture partner LG Energy Solution, the automaker announced Monday.
The Detroit automaker said it expects to recoup its investment in the facility, which is expected to be about $1 billion, a source familiar with the plans said. The sale is part of a non-binding agreement between the two companies that is expected to close in the first quarter of next year, GM said.
The nearly completed 2.8 million-square-foot factory in Lansing, Michigan, is expected to be the third battery cell facility for the joint venture, known as Ultium Cells LLC, after factories in Ohio and Tennessee that are already open and operational.
The Lansing plant was announced in January 2022, and the two companies first announced their joint venture five years ago.
GM's move comes as the automaker tries to scale up electric vehicle production and faces slower-than-expected consumer demand. It also comes amid uncertainty over federal incentives for the production and purchase of electric vehicles in the US under newly elected President Donald Trump.
The automaker said the sale does not affect its overall ownership interest in the joint venture or its future plans for a separate joint venture factory with LGES rival Samsung SDI.
GM CEO and Chairman Mary Barra and LG Chem Vice Chairman and CEO Hak-Cheol Shin at the automaker's battery lab in Warren, Michigan, where the companies announced a new $2.6 billion joint venture on December 5, 2019.
GM
“We believe we have the right cell and manufacturing capabilities to grow with the EV market in a capital-efficient manner,” GM CFO Paul Jacobson said in a press release. “When completed, this transaction will also help LG Energy Solution meet demand by utilizing capacity that is almost ready to come online, and it will make GM even more efficient.”
GM said the South Korean battery supplier will have immediate access to the Lansing factory to begin installing equipment. The factory, which currently employs almost 100 people, should be operational by the end of this year.
In addition to selling its stake in the Lansing plant, GM announced Monday that it will extend a 14-year battery technology partnership with LGES to develop an emerging type of battery cell called prismatic cells.
Prismatic cells have a flat, rectangular shape with a rigid housing, allowing for space-saving packaging in battery modules and packs. GM said the cells are expected to reduce the weight and cost of the EV while simplifying production by reducing the number of modules and mechanical components.
“We are focused on optimizing our battery technology by developing the right battery chemistry and form factors to improve EV performance, increase safety and reduce costs. By expanding our partnership with LG Energy Solution, we are taking an important step toward these goals,” said Kurt Kelty, vice president of Battery Cell and Pack at GM, in a press release.
GM had previously said it planned to expand its battery cell technologies from the flat “Ultium” pouches to other forms, such as prismatic cells.