General Motors (GM) has announced its decision to sell its stake in a $2.6 billion electric vehicle (EV) battery cell plant in Lansing, Michigan, to its joint venture partner, LG Energy Solution (LGES). The Detroit-based automaker expects to recoup approximately $1 billion from the sale, which is part of a nonbinding agreement between the two companies. This transaction is expected to be completed in the first quarter of 2024.
The Lansing facility, a 2.8 million-square-foot plant, is nearly finished and was initially planned to be the third battery cell production site for their joint venture, Ultium Cells LLC, following operational plants in Ohio and Tennessee. The plant was first announced in January 2022, and GM and LGES formed their partnership five years ago.
GM’s decision to sell its stake is driven by the need to adjust production to meet current EV market conditions, including slower-than-expected consumer demand and uncertainties surrounding federal incentives for EV manufacturing and sales in the U.S. under President-elect Donald Trump. However, GM emphasized that the sale would not affect its overall stake in the joint venture or its plans for a separate joint venture with LGES competitor Samsung SDI.
Paul Jacobson, GM’s Chief Financial Officer, expressed confidence that the deal would enable the automaker to continue growing in the EV market efficiently. He stated, “We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner.” Jacobson added that the sale would also help LG Energy Solution meet growing demand by utilizing the nearly ready Lansing facility.
Following the sale, LGES will gain immediate access to the Lansing plant to begin installing equipment, as the facility prepares for operations, expected by the end of 2023. The plant currently employs around 100 people.
In addition to the sale, GM also revealed it is extending its 14-year battery technology partnership with LGES to develop prismatic cells, an emerging battery form factor. Prismatic cells, which are flat and rectangular, offer more efficient space utilization within battery modules and packs. GM highlighted that these cells could reduce the weight and cost of EVs while simplifying the manufacturing process.
Kurt Kelty, GM’s vice president of battery cell and pack, noted, “We’re focused on optimizing our battery technology by developing the right battery chemistries and form factors to improve EV performance, enhance safety, and reduce costs.” The expansion of GM’s battery technologies will also include prismatic cells in addition to its current Ultium pouch-style cells.