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GM, LG halt plan for fourth US EV battery plant

General Motors (GM) is headquartered in Detroit and LG Energy Solution has put plans to build a fourth battery cell plant in the United States on hold indefinitely after talks between the two sides recently ended without an agreement, a person familiar with the plans confirmed.

LG Farewells GM Sales

According to a person who asked not to be identified, because the discussions are private, the Detroit automaker is expected to continue with its plans to build the plant but is looking for another partner.

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

According to the paper, citing unnamed sources familiar with the plans, GM is in talks with at least one other battery supplier to move forward with the fourth U.S. battery-cell factory.

According to the paper, which cites unnamed sources familiar with the plans, GM is in talks with at least one other battery supplier to move forward with the fourth battery-cell factory in the United States.

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US Battery Plants

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General Motors is headquartered in Detroit and LG Energy Solution has put plans to build a fourth battery cell plant in the United States on hold indefinitely after talks between the two sides recently ended without an agreement, a person familiar with the plans confirmed to CNBC.

GM will still require more cells to meet its EV targets. The automaker hopes to produce 400,000 EVs in North America by mid-2024 and claims that its planned cell production will enable this. GM also claims that by 2025, it will be able to produce more than one million electric vehicles in North America.

According to Guidehouse, only about 35% of EV sales will be electric by the end of the decade due to challenges with converting consumers, affordability, and raw material availability. According to GM, it now has binding agreements in place to secure all of the battery raw materials required to support 1 million units of annual capacity in North America by the end of 2025.

According to Abuelsamid, battery plants in North America are in production or have been announced to supply 645 gigatonne hours of available annual capacity in 2026, the amount required to reach 50% EV sales, and additional plants to supply more than that have been announced.

It typically takes three years from the announcement of a battery plant to reach full production. According to Abuelsamid, the three plants announced by GM have a combined annual capacity of 120 gigatonne hours, which could produce more than one million EVs. By 2025, the automaker expects to be able to produce 1 million EVs per year in North America.

LGES also lacks GM’s experience with the United Auto Workers. Its plant in Holland, Michigan, where it is quintupling production, is unorganized. The UAW, on the other hand, plans to begin contract negotiations for the Ultium Cells plant in Warren, Ohio, later this month, after workers there overwhelmingly supported organizing in late December.

The relationship between GM and LG Energy is critical to the automaker’s future EV plans, which include overtaking Tesla and others to become the United States’ leader in all-electric vehicle sales. This year, the Detroit automaker is expected to release a number of new EVs, including mass-market vehicles like the Equinox, Blazer, and Silverado.

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