GM, LG Finish Plans For Fourth US Battery Cell Plant; Automobile producer is on the lookout for a brand new companion
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 joint venture worth 2.6 on December 5, 2019 announced billions of dollars.
DETROIT- General Motors and LG Energy Solution have indefinitely shelved plans to build a fourth battery cell factory in the US as talks between the two sides recently ended without an 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 asked not to be named because talks are private.
“We have made it very clear that our plan includes investing in a fourth U.S. cell factory, but we will not comment on speculation,” GM said in an emailed statement on Friday.
The Wall Street Journal first reported Friday afternoon that talks between GM and LG have stalled in part because LG Energy’s executives in Korea have been reluctant to commit to the company given the rapid pace of its recent investments in other automakers and the uncertain macroeconomic outlook to engage the project.
Citing unnamed sources familiar with the plans, the newspaper said GM is in talks with at least one other battery supplier to proceed with the fourth U.S. battery cell factory.
The breakdown in talks comes after GM CEO Mary Barra and other executives said they have been close to announcing details of the fourth plant, which was set to be built in Indiana.
GM and LG first announced the joint venture for a $2.3 billion plant in Ohio in December 2019, followed by additional plants near GM’s operations in Michigan and Tennessee. Only the Ohio plant is currently operational while the others are under construction. The joint venture is called Ultium Cells LLC.
A spokeswoman for Ultium referred questions to GM and LG Energy. In an emailed statement, LG Energy said discussions about a fourth Ultium Cells plant are “ongoing 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 vehicles, including overcoming Tesla and others to become the US leader in electric vehicle sales. The Detroit-based automaker is expected to launch a handful of new electric vehicles 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 in 2023 and 2024, respectively, as planned. The company also confirmed that it is on track to reach annual production capacity of 1 million electric vehicles in North America by 2025.