GM to sell stake in battery cell plant to joint venture partner for roughly $1 billion

DETROIT — General Motors plans to sell its stake in a $2.6 billion electric vehicle battery cell plant in Michigan to its joint venture partner LG Energy Solution, the automaker announced Monday.

The Detroit carmaker said it expects to recoup its investment in the facility, which a source familiar with the plans said is anticipated to be roughly $1 billion. The sale is part of a nonbinding agreement between the two companies that is anticipated to close during the first quarter of next year, GM said.

The nearly completed, 2.8 million-square-foot plant in Lansing, Michigan, was expected to be the third battery cell facility of the joint venture, known as Ultium Cells LLC, following plants in Ohio and Tennessee that have already opened and are 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 attempts to right size production of EVs and confronts slower-than-expected consumer demand. It also comes amid uncertainty regarding federal incentives for manufacturing and purchasing EVs in the U.S. under President-elect Donald Trump.

The automaker said the sale does not affect its overall ownership stake in the joint venture or its future plans for a separate joint venture plant with LGES rival Samsung SDI.

“We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner,” GM Chief Financial Officer Paul Jacobson said in a release. “When completed, this transaction will also help LG Energy Solution meet demand by leveraging capacity that’s nearly 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 facility to begin installation of equipment. The plant, which currently employs nearly 100 people, was expected to begin operating by the end of this year.

Separate from the sale of its stake in the Lansing facility, GM on Monday announced it will extend a 14-year battery technology partnership with LGES to include the development of an emerging type of battery cell called prismatic cells.

Prismatic cells are a flat, rectangular shape with a rigid enclosure, which allows for space-efficient packaging within battery modules and packs. GM said the cells are expected to reduce EV weights and costs, while simplifying manufacturing by reducing the number of modules and mechanical components.

“We’re focused on optimizing our battery technology by developing the right battery chemistries and form factors to improve EV performance, enhance safety, and reduce costs. By extending our partnership with LG Energy Solution, we’re taking an important step towards these goals,” Kurt Kelty, GM vice president of battery cell and pack, said in a release.

GM had previously said it planned to expand its battery cell technologies from its flat “Ultium” pouches to include other forms such as prismatic cells.

Source:GM to sell stake in battery cell plant to LG partner for $1 billion