Financial News reports that General Motors (GM) has decided to sell its stake in the Ultium Cells Battery Plant 3, currently being constructed in Michigan, USA, to its joint venture partner LG Energy Solution. LG Energy Solution plans to acquire the entire stake. However, the share distribution in the joint venture Ultium Cells will remain unchanged.
GM announced on December 2 (local time) that it would sell its share of the battery plant under construction in Lansing, Michigan, to its partner, LG Energy Solution. The decision is attributed to potential changes in electric vehicle policies due to a shift in the US government and a downturn in electric vehicle demand. This has led to speculation that the global automobile industry might be scaling back its electric vehicle efforts.
Through the sale of its plant stake, GM is expected to recoup approximately $1 billion in investments. The transaction will not affect the share distribution within the joint venture Ultium Cells. GM and LG Energy Solution have been working together to establish the Ultium Cells facilities, with the third plant in Lansing nearly complete. The Ultium Cells 3 Plant was planned to start partial production early next year. However, due to stagnating demand for electric vehicles, operations have been delayed.
GM anticipates improving profitability by adjusting its electric vehicle strategy, while LG Energy Solution benefits from diversifying its client base. The plant is nearly fully constructed, allowing immediate setup. Toyota is a leading contender for the plant’s battery supplies, having agreed to receive 20 GWh annually from LG Energy Solution last year.
Despite selling the Ultium Cells 3 Plant stake, GM and LG Energy Solution intend to expand their collaboration. They have signed an agreement to jointly develop prismatic batteries and essential materials. This new prismatic battery is to be equipped in GM’s next-generation electric vehicles.
This is the first official announcement of LG Energy Solution’s plan to develop prismatic batteries, making it the only company with a comprehensive battery form factor portfolio, including pouch, cylindrical, and prismatic types. The partnership aims to respond strategically as the electric vehicle market grows and diversifies.
The prismatic battery, with its flat, box-like shape encased in aluminum, is highly resistant to external impacts and offers structural simplification at the module and pack levels due to its increased cell rigidity. LG Energy Solution has extensive capabilities and numerous patents in battery development and manufacturing, which will play a critical role in prismatic battery development.
The partnership with GM marks the start of providing tailored battery supplies to key clients, maintaining a balanced portfolio of pouch, cylindrical, and prismatic fixtures. LG Energy Solution’s head of the automotive battery sector stated that this solidified partnership with GM enhances their capacity to create indispensable customer value through new form factor development. Meanwhile, GM’s executive highlighted that this expanded collaboration will further enhance electric vehicle performance, safety, and cost-efficiency.