GM still plans to fully electrify its light duty lineup by 2035, despite fluctuations in consumer demand for EVs. To that end, the automaker has built out its capacity to produce EV batteries with new battery production plants in the U.S. However, General Motors recently announced that it will sell its stake in a third Ultium Cells plant back to its joint venture partner, LG Energy Solution. Now, General Motors CFO Paul Jacobson has commented on the move, indicating that a third Ultium plant was not needed.
GM CFO Paul Jacobson
Per a report from Automotive News, Jacobson addressed the decision at the recent Alliance for Automotive Innovation conference, stating that LG Energy has “a lot of demand” for new EV batteries, whereas GM has “a little bit of excess capacity” when it comes to EV batteries.
“This is a great example of what that partnership can mean,” Jacobson said.
The Ultium Cells plant in Lansing Michigan will now become wholly owned by LG Energy Solution, and will provide batteries to another automaker. The facility represents a $2.6 billion investment on the part of General Motors and LG Energy Solution, and is one of three plants constructed under the joint venture.
GM also plans to build a new $3.5 billion battery plant with joint venture partner Samsung SDI in Indiana, slated to open in 2027. The plant in Indiana will build prismatic battery cells, which are lighter and more cost-effective than the pouch-type cells produced at the Ultium Cell plants in Ohio and Tennessee. General Motors will also co-develop prismatic cell technology with LG Energy Solution.
There’s still a good degree of uncertainty in the ramp-up to mainstream EV adoption, with slower-than-expected adoption rates and lagging infrastructure build-outs hampering automaker plans. In addition, the incoming Trump administration is expected to cut the $7,500 federal tax credit, which will likely slow adoption rates even further.
Jacobson indicated that General Motors has EV capacity that is “slightly ahead” of the market, but has the flexibility to scale up EVs or ICE vehicles thanks to facilities that can build both powertrain types.
Comments
GM overestimated EV demand in their current state. I’m going to be blunt: EVs are boring. Technology is exciting. If you want to get people to buy in, you have to develop new technology that make people’s lives easier. Then EV sales will go up.
Spoken like someone who’s probably never even driven an EV, let alone lived with one for any extended period of time… After owning one for a while now, I’ve realised the only people worried about range and chargetimes are non-homeowners and people who have never actually owned an EV… Plugging a car in when you pull into the driveway; leaving home with a full “tank of fuel” every morning. Think about how little you’d even care about MPG or gas prices if your car magically filled itself full for pennies everytime your car is parked at home? I haven’t even thought about range since about day 5 of ownership… What’s “easier” than that?
You’ve confirmed my belief about EVs that they are city cars, considering the state of rural charging particularly off interstate highways. I don’t need or can afford an 80% vehicle. Also, there are lots of people that cannot charge at home. Recent articles tell me first time home ownership is more and more difficult. That doesn’t bode well for EV adoption. Retrofitting apartments for widespread charging is expensive and time consuming.
“Slightly ahead of the EV market”??? Try “way ahead and over-obsessed with EVs, period”.
I hope someone is following the $billions of government handouts for these plants, to see who is now benefiting from our tax dollars. gm doesn’t need this unfinished battery plant, but is soon going to break ground on a new battery plant? I smell a rat.
This is a smart move. They made a moderate mistake in committing to the pouch form factor. Kelty came in and immediately changed direction and they are going to go prismatic. Sunk cost on 2 pouch plants – probably not the end of the world. But new plants should go prismatic. This seems like the right direction. Tesla seems to be having difficulty scaling cylindrical into larger/denser form factors. BYD is kicking ass with their prismatic blade architecture. Too many times you see folks get pot committed and double down on a mistake because they’re too proud to admit a mistake or lose face. This is responsible leadership and shows they care about capital efficiency.
Yeah, not understanding all the criticism over this. I honestly think the cell format discussion gets a bit ridiculous sometimes, especially since the BEV3 platform has accommodated multiple formats from the beginning.
It is unlikely that GM will move entirely off pouch batteries any time soon, but the combined production capacity at the Warren and Spring Hill plants is 91GWh; more than enough for them to support growth for the next couple years (especially since the Bolt family is going to be using sourced LFP batteries at launch).
For medium term needs they’re already working with Samsung on another plant and exploring a partnership with CATL as well. This is diversification, not retreat.
Humility goes a long way. While we’re on the topic of Chinese EVs, NIO is on record of admitting that battery swapping which at face value seem well vested in, the founder has said it is not a terminal solution and admits that ultimately batteries will need to charge faster and have more range. I have respect for people like this that are aware of the challenges engineering poses and how it can evolve and not to spend too much time banking on one thing to work.
In my opinion, there will be a lot of smaller auto companies that will build one of two EV. They are too small to build their own battery plant, and it is much easier to purchase a battery from an established battery provider. With GM name not associated with the plant, it will be better for LG to provide the small auto companies with specialize batteries. Companies may think GM will get information on their EV before time because companies have to put in for batteries build to specialize sizes a yearor two in advance.
Kind of a big miss! Eh!
Who got fired?
1000 employees who had nothing to do with Barra’s blunder.
Mary will never get fired. The girls made a big mistake with this all electric nonsense. No range towing, no good in the cold. A very limited niche market that Tesla has already satisfied. The GM toadies on here that say it’s smart to change direction should be saying it’s smart to make the right decision. If the boys like wagoner were making the wrong call there would be a price to pay. Mary has run GM into a really poor place with no hybrids available for years to come and pulling a lot of resources off gas engine and trucks. Poor call. Just dumb. Got to give Toyota credit for hitting the target.
“pulling a lot of resources off gas engine and trucks”. You are talking like GM has pulled resources from your savings account. The line of trucks and ICE engines is doing good so far. Like in investing strategies, the key word is : DIVERSIFY. The EV market is here to stay and grow. US car manufacturers cannot let China be the leader in the new technology. Maintaining a presence in that market will test the competitiveness of the GM product.
“…. CFO Paul Jacobson has commented on the move, indicating that a third Ultium plant was not needed.”
That’s why billions were spent to build it. Clowns running the show.
Lots of uninformed comments based on EV misconceptions and by those who haven’t followed the battery technology advances GM has made since the Ultium ramp up.
The Ultium platform & modular cells were a great concept that drove down production costs & increased vehicle range. But Ultium was never going to be a one and done. This move by GM, especially with the new cell plant opening in 2027 signals that GM is already to roll out the next generation of advanced batteries that will be even cheaper to produce and likely longer range.
This is good business and good for the evolution of EV technology, and it is explains a lot about why GM started to move away from the “Ultium branding” on their EVs after he Lyriq launch.
Toyota is going to eat everybody’s lunch after 2025- the phev’s they have will destroy the small EV segment and likely the mid size as well
Much of the money to build it was supplied by the current administration’s Green New Deal-tax rebates, grants and special programs