GM, LG Scrap Plans to Build Fourth EV Battery Plant
General Motors (NYSE: GM) and LG Energy Solution have halted plans for a battery-cell factory in the US, according to people cited by the Wall Street Journal. The facility would have been the fourth to be developed by the companies through their 50-50 joint venture, Ultium Cells LLC.
Ultium Cells currently operates one factory in Ohio and is developing two more in Tennessee and Michigan, with a total investment of over $6.5 billion. GM had previously announced that the automaker was close to devising plans for a fourth US battery-cell factory; however, recent talks between GM and LG Energy executives ended without an agreement to move forward with the project.
Among the reasons for scrapping the project indefinitely are LG executives’ hesitancy to commit to building the factory, mostly due to the company’s previously expedited pace of US investments. GM and LG also had opposing viewpoints on the process for workers at the 900-employee Ohio factory to form a union; GM executives supported a less-formal and quicker path to unionizing than a confidential vote, while LG executives rejected that idea and pressed for the workers to vote through a formal election. LG also blamed growing economic uncertainties for halting construction of the fourth battery facility.
Despite this setback, GM stated that it is still on track to reach one million EV sales annually in North America by 2025. The automaker GM is allegedly holding discussions with other battery suppliers to proceed with additional US battery-cell factories instead.
Information for this briefing was found via the WSJ. 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.
