Short dive:
- General Motors has entered into a non-binding agreement to sell its stake in the Ultium Cells electric vehicle battery cell plant in Lansing, Michigan, to its joint venture partner LG Energy Solution, the company announced. in a December 2 press release.
- As part of the agreement, LG Energy Solution will have immediate access to the 2.8 million square foot facility to begin installing battery cell manufacturing equipment. The plant is nearing completion and will have an annual capacity of 41 gigawatt hours.
- GM said the transaction, which is expected to close in the first quarter of 2025, will help the company regain its market share. Investment of $2.6 billion in the facility.
Diving information:
The Michigan battery plant was one of three U.S. plants that GM planned to operate as part of its Ultium Cells joint venture, but the automaker aims to strategically adjust production capacity and control costs as the electric vehicle market expands.
“We believe we have the right airframe and manufacturing capabilities to grow in the electric vehicle market in a capital-efficient manner,” Paul Jaconbson, GM EVP and CFO, said in the release. “Once completed, this transaction will also help LG Energy. The solution meets demand by leveraging capacity that is nearly ready to come online and will make GM even more efficient.”
The Ultium Cells joint venture initially planned to have more than 130 GWh of battery cell capacity across three facilities once it reached full capacity by the end of this decade.
The sale of GM’s stake in the Michigan battery cell plant, however, does not change the automaker’s stake in the Ultium Cells joint venture. GM will continue to jointly operate its two other battery cell manufacturing plants in Warren, Ohio, and Spring Hill, Tennessee, with its partner LG Energy Solution.
“Our electric vehicle profitability is rapidly improving thanks in part to our strategic decision to build batteries in the United States with LG Energy Solution,” Jacobson said in the release.
Cells produced at the Ultium Cells joint venture’s battery plants in Ohio and Tennessee are currently used in the Chevrolet Silverado EV, GMC Sierra EV, Cadillac Lyriq, Chevrolet Blazer EV and Chevrolet Equinox EV, as well as the GMC Hummer EV pickup and SUV . .
GM is making other changes to its deals with LG Energy Solution, as well as divesting from the battery plant. On Dec. 2, the partners announced that they had amended their 14-year technology partnership to include the development of prismatic cells.
Prismatic cells are made with a flat, rectangular shape and typically housed in a rigid casing typically made of steel or aluminum. The flat, compact design allows more cells to fit inside an electric vehicle’s battery pack than cylindrical cells, which can help improve range and increase power output. According to the release, the use of prismatic cells can also simplify production by reducing the number of modules and mechanical components, resulting in weight and cost reductions.
GM plans to offer prismatic battery cells in future electric vehicles as part of the company’s strategy to diversify its supply chain using a mix of different battery cell designs.
“We look forward to deepening our collaboration to advance the right chemistries and battery combinations for continued growth in the electric vehicle market,” Wonjoon Suh, executive vice president and head of LG Energy Solution’s advanced automotive battery business, said in the release. .