General Motors (NYSE: GM) is rather committed to the oncoming demand for electric vehicles, announcing this morning that it will be constructing a fourth battery plant in the United States. The plant, unlike prior arrangements, is to be built in conjunction with Samsung SDI, and marks the first battery plant not built in partnership with LG Energy.
The partnership with Samsung follows the break down of talks between GM and LG for a fourth battery plant, which would have been constructed under their partnership known as Ultium Cells in Indiana. Despite talks being on hold “indefinitely” the partnership has three plants either in production or under construction currently, with a combined capacity of 130 GWh of annual battery production. The first facility is located in Ohio, while two facilities under construction are in Tennessee and Michigan.
A location for the new facility in partnership with Samsung has not been disclosed, nor have expected employment figures, although the latter is expected to “number in the thousands.” The facility is expected to house annual production capacity of more than 30 GWh, and has an initial price tag in excess of $3.0 billion. Operations are slated to begin in 2026.
“GM’s supply chain strategy for EVs is focused on scalability, resiliency, sustainability and cost-competitiveness. Our new relationship with Samsung SDI will help us achieve all these objectives. The cells we will build together will help us scale our EV capacity in North America well beyond 1 million units annually,” commented Mary Barra, Chair and CEO of General Motors.
The new facility is expected to produce both nickel-rich prismatic and cylindrical cells.
“The introduction of new cell form factors will allow us to expand into even more segments more quickly and integrate cells directly into battery packs to reduce weight, complexity and costs. With multiple strong cell partners, we can scale our EV business faster than we could going it alone,” commented Doug Parks, Executive VP of Global Product Development, Purchasing and Supply Chain.
Chevy Bolt EV to be discontinued
While General Motors may be increasing its future capacity for electric vehicles, it is also rejigging its product mix for the segment. The company this morning on its earnings call revealed that it will be ending production of the Chevy Bolt EV and the EUV.
The decision to end the production of the Bolt comes as production for its electric pickup is set to begin next year. The current production capacity at the firms Orion Township, Michigan, factory will be used instead for the electric truck models.
The end of the line for the Bolt however was not unexpected, given that the model was based on the dated, and soon obsolete, BEV2 platform. Going forward, electric vehicles produced by the company are to be based on the Ultium battery architecture. For consumers, the downside is that the Bolt EV was one of the cheapest EV’s on the market, with a starting price tag of US$24,000, which is before applicable tax credits of up to US$7,500. The Chevy Equinox EV going forward is instead expected to take the title of the cheapest EV offering from the firm, with a starting price tag of an estimated US$30,000.
The news of the discontinuation of the Chevy Bolt EV and the new partnership with Samsung SDI was released in conjunction with the firms first quarter financial results.
The results saw the company grow its revenue 11% on a year over year basis to $40.0 billion, while net income declined 18% to $2.4 billion and EBIT-adjusted came in at $3.8 billion, a decline of 6.0%. The firms net income margin declined 26% to 6.0% for the quarter, while its EBIT-adjusted margin amounted to 9.5%, down from 11.2% in the comparable period. Automotive operating cash flow meanwhile improved 36.5% to $2.2 billion.
General Motors also revised down its expected net income for 2023, dropping the figure from $8.7 billion – $10.1 billion to that of $8.4 billion – $9.9 billion. EBIT-adjusted meanwhile improved from $10.5 billion – $12.5 billion to that of $11.0 billion – $13.0 billion. Adjusted automotive free cash flow meanwhile is expected to land between $5.5 billion – $7.5 billion, versus prior guidance of $5.0 billion – $7.0 billion.
Information for this briefing was found via General Motors, Electrek, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.