General Motors Co. and LG Energy Solution have canceled their battery joint venture partnership to build a fourth plant in the United States. This comes after tension between the two companies started with timeline indifferences.
Head of Advanced Automotive Battery Division (EVP)-LG Energy Solution, David(Dong-Myung) Kim (R) speaks at an event where General Motors announced an investment of more than $7 billion in four Michigan manufacturing sites on January 25, 2022 in Lansing, Michigan. - General Motors will create 4,000 new jobs and retaining 1,000, and significantly increasing battery cell and electric truck manufacturing capacity. This is the single largest investment announcement in GM history. The investment includes construction of a new Ultium Cells battery cell plant in Lansing and the conversion of GM's assembly plant in Orion Township, Michigan for production of the Chevrolet Silverado EV and the electric GMC Sierra, GM's second assembly plant scheduled to build full-size electric pickups.JEFF KOWALSKY/AFP via Getty Images
(Photo : JEFF KOWALSKY/AFP via Getty Images) Head of Advanced Automotive Battery Division (EVP)-LG Energy Solution, David(Dong-Myung) Kim (R) speaks at an event where General Motors announced an investment of more than $7 billion in four Michigan manufacturing sites on January 25, 2022 in Lansing, Michigan. - General Motors will create 4,000 new jobs and retaining 1,000, and significantly increasing battery cell and electric truck manufacturing capacity.
Canceling Joint-Venture Plans
A battery-cell factory in the United States that had been in the works for months has been shelved indefinitely. Electrek reported that this was supposed to be a joint venture between two companies, LG Energy Solution and General Motors Inc.
This made GM look for other potential partners in the industry. The company is currently discussing plans with at least one battery supplier to proceed with this venture, but specifics were not discussed. "We've been very clear that our plan includes investing in a fourth U.S. cell plant," GM said.
The company is still planning to build its fourth battery plants to have enough supply and production to build 400,000 electric vehicles in North America by 2024 and 1 million in 2025. The Ultrium Plant in Tennessee will open this year, while another plant in Michigan is scheduled to start production next year.
Disagreements
In a report from Wall Street Journal, the talks between GM and LG ended without an agreement to move forward, which could have been the fourth battery to be developed in the United States. The battery maker did not commit to the timeline presented by the company.
Aside from this, a couple of incidents have tested the partnership of the two companies, including the recall of all built 143,000 Chevrolet Bolt EVs due to battery fires that made the partner pick up most of the cost.
Both companies also have different views on managing a union organizing drive in Ultrium Cells LLC, located in Lordstown, Ohio.
LG Energy Executives in Korea were also hesitant to commit to the project by just looking at the rapid pace of the company's recent investments in the United States. One of their deciding factors is the uncertainty in the global economy.
While the battery plant is halted indefinitely, the two companies will continue their joint venture plant and the two planned facilities in Tennessee and Michigan. Bloomberg reported that all of these joint ventures represent a total investment of more than $6.5 billion.
The partnership of GM and LG is one of the first several car-company joint ventures with battery makers aiming to secure enough supplies to support the target of the car industry in dominating the market with EVs.
By 2025, the Ultium Battery plant will be used for 30 different electric vehicles, with Hummer pickup and Cadillac Lyriq being the first two in the lineup. GM also plans to build the electric Chevrolet Silverado pickup, Blazer, and Equinox before the year ends.
All of the mentioned vehicles will get battery cells from the Lordstwon plant.
