GM will sell stake in EV battery plant to its partner LG

General Motors said on Dec 2 that it was selling its stake in a nearly complete battery factory in Michigan to its partner LG Energy Solution, reducing to three the number of battery plants the carmaker will operate in the United States.

GM and LG, a South Korean company, already produce batteries jointly at factories in Warren, Ohio, and Spring Hill, Tennessee, that supply vehicles such as the Cadillac Lyriq and Chevrolet Equinox.

GM has a separate battery joint venture with Samsung SDI that is building a factory in New Carlisle, Indiana. GM said it remained committed to that project.

Electric vehicle (EV) sales, while brisk, have not lived up to projections from a few years ago, prompting many carmakers to delay or cancel investments.

“We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner,” Mr Paul Jacobson, GM’s chief financial officer, said in a statement.

LG will complete work on the Michigan factory, in Lansing, and sell its output to another customer, which will be named later. GM said it would get back the US$1 billion (S$1.35 billion) it had invested in the factory, which is nearly finished.

GM has boasted that it is close to making a profit on EVs in part because it can mass-produce batteries in the US, driving down costs and taking advantage of manufacturing subsidies offered by the Biden administration.

GM sold more EVs in the US than any carmaker except Tesla during the third quarter, according to Cox Automotive.

But US President-elect Donald Trump and Republicans in Congress may undo or reduce those subsidies in 2025, forcing carmakers and battery producers to reassess whether they can expect a return on their investments.

GM has also been re-examining its approach to EV batteries since hiring former Tesla executive Kurt Kelty as vice-president for batteries in February.

Mr Kelty has said GM will diversify the kinds of batteries it uses, tailoring them to different vehicles and price ranges.

Along those lines, GM also said on Dec 2 that it would jointly develop prismatic batteries with LG Energy Solution.

Prismatic batteries are packaged in rigid cases that weigh less and are simpler to manufacture, GM said.

GM and LG currently produce so-called pouch batteries, which have soft packaging.

“We’re focused on optimising our battery technology by developing the right battery chemistries and form factors to improve EV performance, enhance safety and reduce costs,” Mr Kelty said in a statement on Dec 2. NYTIMES