GM and LG to spend $2.3 billion on second EV battery plant in U.S.


GM CEO and chairman Mary Barra speaks throughout an “EV Day” on March 4, 2020 on the firm’s tech and design campus in Warren, Mich., a suburb of Detroit

GM

General Motors and South Korea’s LG Chem will make investments greater than $2.3 billion in a second U.S. battery cell plant for electrical automobiles in Tennessee, the businesses introduced Friday.

The plant for his or her Ultium Cells LLC three way partnership can be to help manufacturing of GM’s upcoming Cadillac Lyriq crossover and different future EVs at a close-by meeting plant.

The provide and manufacturing of battery cells are crucial for automakers pivoting to electrical automobiles. The three way partnership for the brand new plant whereas its first remains to be below building in Lordstown, Ohio, underscores that.

Construction on the roughly 2.8 million-square-foot facility will start instantly. The plant is scheduled to open in late 2023 and will create 1,300 jobs, the businesses mentioned.

“The addition of our second all-new Ultium battery cell plant in the U.S. with our joint venture partner LG Energy Solution is another major step in our transition to an all-electric future,” GM CEO Mary Barra mentioned in a launch.

The announcement comes amid a 100-day review ordered by President Joe Biden of the U.S. provide chain for superior batteries, prescription drugs, crucial minerals and semiconductors. He ordered the assessment amid an ongoing international scarcity of semiconductor chips that has considerably impacted U.S. auto manufacturing in 2021.

GM confirmed final month that it was evaluating a second location in the U.S. to produce battery cells for electrical automobiles with LG. Reuters reported particulars of the announcement Wednesday.

LG Energy Solution President and CEO Jong Hyun Kim mentioned the brand new facility will permit the businesses “to build solid and stable U.S.-based supply chains that enable everything from research, product development and production to the procurement of raw components.”

Some analysts, particularly Morgan Stanley’s Adam Jonas, have warned of a possible scarcity due to cell capability in contrast with the quantity of recent EVs anticipated to come to market in coming years.

“In our opinion, GM’s formation of Ultium/Ultium Cells LLC will prove to be a critical point of strategic differentiation that will ultimately drive value creation for shareholders,” he mentioned Wednesday in a notice to buyers.

Ultium is GM’s next-generation batteries and platform, that are anticipated to debut this yr in the GMC Hummer EV pickup. The first automobiles are usually not anticipated to embrace Ultium battery cells from the Ohio plant that is below building.

An undated handout photograph exhibits the brand new Cadillac Lyriq, one of many electrical automobiles that General Motors Co mentioned on October 20, 2020, that its Spring Hill, Tennessee, manufacturing unit will start to produce.

General Motors Co. | Reuters

GM is anticipated to proceed to construct or convert vegetation to battery amenities in the U.S. because it strikes to grow to be an automaker that solely presents electrical automobiles by 2035. That consists of no less than 30 new EVs by 2025 under a $27 billion funding plant in electrical and autonomous automobiles throughout that time-frame.

Most batteries, like semiconductors, are manufactured in Asia and Europe. Tesla operates an enormous battery and cell manufacturing facility with Panasonic in Nevada. Tesla additionally instructed buyers in September that it began producing its personal cells at a pilot plant in Fremont, California.

GM and LG first introduced the three way partnership in December 2019.