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General Motors Sells Stake In Factory To Its Partner LG Energy Solutions
General Motors plans to sell its $2.6 billion stake in a Michigan electric vehicle battery plant to its joint venture partner LG Energy Solutions.
According to a source familiar with the plans, the Detroit automaker expects to recoup its investment in the facility, which is expected to be about $1 billion. GM said that the sale is part of a non-binding agreement between the two companies that is expected to close during the first quarter of next year.
The near-complete plant in Lansing, Michigan, is slated to be the third battery cell plant of the joint venture, known as Ultium Cells LLC, following plants in Ohio and Tennessee that are already up and running.
The Lansing plant was announced in January 2022, and the two companies first announced a joint venture five years ago.
GM’s move comes as the automaker tries to ramp up production of electric vehicles and faces slower-than-expected consumer demand. It also comes amid uncertainty over federal incentives for producing and purchasing electric vehicles in the US under President-elect Donald Trump.
The automaker said the sale does not affect its overall ownership stake in the joint venture or its plans for a separate joint venture plant with LGES rival Samsung SDI.
“We believe we have the right cells and manufacturing capabilities to grow with the electric vehicle market in a capital-efficient manner,” GM Chief Financial Officer Paul Jacobson said in a statement. “Once completed, this transaction will also help LG Energy Solution meet demand by utilizing capacity.”
GM said the South Korean battery supplier will have immediate access to the Lansing facility to begin equipment installation. The factory, which currently employs almost 100 people, should start operating by the end of this year.
Separate from the sale of its stake in the Lansing plant, GM announced that it will extend a 14-year battery technology partnership with LGES to include the development of a new type of battery cell called prismatic cells.
