Like so many other car groups, General Motors is struggling against a bad economy. Now they are trying to sell a billion-dollar battery factory.
General Motors is selling its stake in a battery factory in Lansing, Michigan, to LG Energy Solution.
The factory, which is under construction, is expected to open in the coming months. Construction began in 2022, and the plant was owned by GM and LG through their joint venture, Ultium Cells.
GM has invested approximately DKK 7.5 billion in the factory and expects to have the investment fully covered.
The factory currently employs 100 employees. But this figure is expected to rise to 1,700. It is expected that the factory under LG's ownership will supply batteries to another car manufacturer. However, no further details have yet been released.
– Our EV profitability is improving rapidly, thanks in part to our strategic decision to build battery cells in the US with LG Energy Solution.
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– It will take years for some of our competitors to reach this level. We believe we have the right cell and manufacturing capabilities to grow with the electric vehicle market in a capital-efficient manner.
– When the deal is completed, it will also help LG Energy Solution to meet demand by utilizing capacity that is almost ready to come online, and this will make GM even more efficient, says Paul Jacobson, director of finance at GM, in a press release .
Ultium Cells also operates other battery plants in the United States. These factories supply batteries for vehicles such as Chevrolet Silverado EV, GMC Sierra EV, Cadillac Lyriq, Chevrolet Blazer EV, Chevrolet Equinox EV as well as GMC Hummer EV Pickup and SUV.
Despite the sale of the battery factory, General Motors and LG Energy Solution still have a close collaboration.
On the same day as the sale was announced, the two companies announced that they are expanding their 14-year battery development partnership to include battery cell development.
These new cells will be used in future electric cars from GM and are expected to reduce weight and costs, as well as simplify production processes at the car group's factories.
"Together with LG Energy Solution, we have built Ultium Cells into one of the largest manufacturers of battery cells in North America, created thousands of advanced technology jobs in the United States and powered our portfolio of electric vehicles," said Kurt Kelty, vice president of battery cells and packs in GM.
– We focus on optimizing our battery technology by developing the right battery chemistry and form factors to improve the performance of electric cars, increase safety and reduce costs. By extending our partnership with LG Energy Solution, we are taking an important step towards these goals.”
