In light of the sluggish electric vehicle (EV) market and uncertainties following Donald Trump's re-election, LG Energy Solution (LGES) will acquire all shares of the battery plant jointly constructed with General Motors (GM) in Michigan. However, both parties will continue their collaboration on battery technology, focusing on the development of prismatic batteries.
According to reports from media outlets including ZD Net Korea and The Seoul Economic Daily, GM recently announced a non-binding agreement with LGES to sell its nearly completed Ultium Cells battery plant in Lansing, Michigan. The sale is expected to take place in the first quarter of 2025, with GM anticipated to recover approximately US$1 billion of its investment.
GM and LGES established the battery joint venture Ultium Cells, which has its first two plants located in Ohio and Tennessee, while Michigan serves as the site for the third plant, with a total investment scale of US$2.6 billion. It was reported that the third plant was originally scheduled to be completed in the second half of 2024, with initial production set to begin in early 2025. However, due to poor EV market conditions, automakers have started adjusting their investment pace, leading to delays in the operation of the third plant.
Some analysts believe that concerns over long-term low demand for EVs, especially after Trump proposed eliminating EV subsidies, have prompted GM to reduce its investment scale.
Nevertheless, since LGES's first wholly-owned factory in the US is also located in Michigan, it possesses geographical advantages in terms of workforce adjustment and technical cooperation. If LGES successfully acquires the third plant, it can effectively regulate production volume from Michigan, which is described as the new center of the American EV industry.
While GM is reducing its investments in battery manufacturing, it continues to maintain a strong partnership with LGES. Recently, both companies signed an agreement to conduct joint research for prismatic battery and core materials, promoting R&D of diverse batter types. This collaboration marks LGES's first development of prismatic batteries, which are advantageous for resisting external impacts but have poorer internal space utilization efficiency.
However, global EV manufacturers are continuously segmenting the market based on vehicle types, sizes, and regions. Considering the differences across various markets, there is an increasing number of customers planning to adopt batteries for different purposes. Through this collaboration with GM, LGES will enhance its capability to meet the supply demands of various customer requirements.
LGES stated that discussions are underway regarding the purchase of Ultium Cells' third plant, aiming to improve investment and operational efficiency at North American factories and maximize utilization rates. An official announcement will follow once confirmed.
