The joint venture project between GM and LG Energy Solution for the construction of a fourth battery plant in the United States has been abandoned. Following the massive recall of the Chevrolet Bolt EV, due to the risk of battery fire, the South Korean manufacturer agreed to pay 1.9 billion dollars (about 1.750 billion euros) out of 2 billion costs (ie more than 1.800 billion euros).
Other conflicts undermined the process as it began, which apparently led to a change in plan. However, LGES has not yet left the negotiating table. His officials, on the other hand, confirmed that discussions are still ongoing. This story marks a break in the partnership between GM and LGES.
What are GM’s plans for the future?
GM already has an Ultium plant in Lordstown, Ohio. Two others, still in partnership with LGES, are being built in Tennessee and Michigan. Their respective launches are planned for this year and 2024. Indeed, the cooperation between these two entities provided for the construction of four production sites. Bloomberg reported that the American automaker plans to deliver 400,000 electric vehicles to the U.S. market by mid-2024 and 1,000,000 by 2030. LGS disagreed, because to do so, the automaker needs to be supplied with the right battery.
GM officials in a recent press release noted: we have been very clear that our plan is to invest in a fourth cell factory in the United States, but we will not comment on speculation. “. Then they would look for a new partner to realize all these projects.
What will happen to Ultium Cells LCC?
In the event that GM decides to partner with another manufacturing company, there is no guarantee that Ultium will take over the management of the plant. It is possible that it will have its management. The latter can then work with a new supplier. As a reminder, Ultium Cells LCC is a joint venture between GM and LGES.
The Ultium brand being the property of GM, the latter can use it as it sees fit. However, the batteries to be manufactured at this fourth production site will either not be equipped with Ultium cells or will not have Ultium’s design.