GM and LG end plans for fourth U.S. battery cell plant as automaker seeks new partner

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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

DETROIT – General engines and LG Energy Solution have indefinitely suspended plans to build a fourth battery cell plant in the US as talks between the two sides recently ended without agreement, a person familiar with the plans confirmed to CNBC.

The Detroit automaker is expected to go ahead with plans to build the plant, but is looking for another partner, according to the person who declined to be named because the talks are private.

“We’ve been very clear that our plan includes an investment in a fourth U.S. cell plant, but we’re not going to comment on speculation,” GM said in an emailed statement Friday.

The Wall Street Journal first reported Friday afternoon that talks between GM and LG had stalled in part as LG Energy executives in Korea were hesitant to commit to the project given the rapid pace of recent investment with other automakers and the uncertain macroeconomic outlook.

The paper, citing anonymous sources familiar with the plans, said GM is in talks with at least one other battery supplier to proceed with the fourth U.S. battery cell plant.

The break in talks comes after GM CEO Mary Barra and other executives said they have been on the verge of announcing details of the fourth plant, expected to be built in Indiana, for some time.

GM and LG initially announced the joint venture in December 2019 for a $2.3 billion plant in Ohio, followed by other plants near GM operations in Michigan and Tennessee. Only the Ohio plant is currently in operation, with the others under construction. The joint venture is called Ultium Cells LLC.

An Ultium spokeswoman referred questions to GM and LG Energy. In an emailed statement, LG Energy said talks about a fourth Ultium Cells plant “continue to progress between LG Energy Solution and GM, but no decision has been made.”

The relationship between GM and LG Energy is critical to the automaker’s future plans for electric cars, including surpassing Tesla and others to become the US leader in sales of all-electric vehicles. The Detroit automaker is expected to release a handful of new EVs this year, including mass-market vehicles like the Equinox, Blazer and Silverado.

GM said in its Friday statement that its second and third plants with LG are on track to open as planned in 2023 and 2024, respectively. The company also confirmed it is on track to produce 1 million electric vehicles annually in North America by 2025. -America.



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