General Motors (GM) announced Monday a shift in its electric vehicle (EV) strategy by agreeing to sell its share of a nearly completed battery plant in Lansing, Mich. to its joint venture partner, LG Energy Solution of South Korea.
GM confirmed that the arrangement with LG is a nonbinding agreement, with expectations to finalize the transaction by the end of first quarter of 2025. The financial specifics remain undisclosed. GM revealed its anticipation to recover $1 billion of investment it has made in the Lansing factory, The Associated Press reported.
GM will also continue to depend on its joint venture operations in Warren, Ohio, and Spring Hill, Tenn. These facilities will provide the necessary battery supply to support the production of seven EVs currently available in the U.S. market. Ultium Cells Lansing currently employs nearly 100 workers and remains on track to achieve its employment targets, but GM has yet to announce a new opening date. Once operational, the plant is expected to employ about 1,700 people.
GM Executive Vice President and CFO Paul Jacobson Jacobson said that their current cell and manufacturing capabilities are well-suited to expand along with the EV market. He also said that once this partnership is fully operational, it will not only meet increasing demand for LG Energy Solution but also enhance GM’s efficiency.
“Our EV profitability is rapidly improving thanks in part to our strategic decision to build battery cells in the U.S. with LG Energy Solution. It will be years before some of our competitors approach this level of performance,”Jacobson said.
‘It’s Absolutely Pathetic’: Swing-State Autoworkers Tell CNN ‘Deteriorated’ Economy, EV Mandate Drive Them To Vote Trump pic.twitter.com/ydUn3Xcftl
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The automotive industry in the U.S. has experienced a noticeable slowdown in its push towards electric vehicle and battery manufacturing, attributed to a deceleration in EV sales growth, according to The Associated Press. After an increase in 2023, the growth rate has tempered with data from Motorintelligence.com showing that, through September, new EV sales in the U.S. rose by 7.2% to approximately 936,000.
This pace is considerably slower compared to the 47% surge seen in 2023, however, 2024’s EV sales are still projected to exceed last year’s record of 1.19 million, with EVs making up 7.9% of new vehicle sales, slightly higher than the previous year’s 7.6%, AP reported.
GM eliminated 1,000 positions earlier in November aiming to reduce expenses and enhance sales of EVs. Despite rising EV sales through this year’s third quarter, GM is projected to incur losses on EVs into 2025. Approximately 5,000 GM executives and employees opted for voluntary buyouts last year to help the company stave off widespread layoffs.
(Featured Image Media Credit: Official White House Photo by Adam Schultz)
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