GM and LG call off partnership for a fourth battery plant; GM seeks new partner

Jamie L. LaReau, Detroit Free Press
Fri, January 20, 2023

General Motors and LG Energy Solution have tentatively called off plans to build a fourth battery cell plant in the U.S. together as part of their joint venture Ultium Cells LLC after the two sides failed to reach an agreement on details for that fourth plant, a person familiar with the plans confirmed to the Detroit Free Press on Friday night.

GM is expected to seek a new battery cells partner for the fourth plant, the person said. The person asked to not be named because negotiations are private.

GM spokesman Dan Flores told the Free Press on Friday evening, "We are absolutely committed to the fourth battery cell plant in the U.S., but we’re not going to comment on the speculation (about the faltering partnership with LG) that is out there now.”

The Ultium Cells LLC battery cell manufacturing facility in Lordstown, Ohio, will be about the size of 30 football fields and will have annual capacity of more than 30 gigawatt hours with flexibility for expansion. It is expected to open in August 2022.

Flores said GM also remains on track to have the manufacturing capacity to build 1 million electric vehicles in North America by the end of 2025.

GM faces a challenge though. There are few battery cell manufacturers the size of LG to help GM achieve its goal to bring 30 new EVs to market by the end of 2025 and be a zero emissions carmaker by 2035, the person said. GM would not go with a startup because battery cells are too important to risk. It likely won’t go after SK International because SK is partnered with Ford Motor. So that leaves longtime Tesla battery supplier Panasonic and Samsung SDI as possibilities, the person said.

GM and LG formed Ultium Cells in 2019. The first of its four U.S. plants was built in Warren, Ohio, and started running this year. Ultium is also spending $2.3 billion to build a plant near GM's Spring Hill Assembly plant, where GM assembles the Cadillac Lyriq EV. That battery cell plant will open in late 2023. Ultium Cells is also spending $2.6 billion to build a plant in Lansing Delta Township in Michigan to start production in 2024. Those plants remain on schedule, and that partnership with LG is intact.

Ultium Cells had been saying for months that it would build a fourth factory in North America, but it failed to announce a location. As the Free Press reported in August, the company was considering New Carlisle, Indiana, which is about 15 miles west of South Bend.

The person familiar with the talks said GM and LG did look at New Carlisle and had secured tax abatements and other government agreements, but ultimately the two sides ended “in a stalemate” on various terms for construction and location.

The Wall Street Journal first reported that talks had stalled between GM and LG, citing unnamed sources. The report said part of the reason was because LG executives in Korea were reluctant to commit money to the project because of the fast pace of its recent investments with other carmakers. They also had concerns about the economy. The WSJ said GM is in discussions with at least one other battery supplier to go forward with the fourth factory.