Rumor: GM-LGES Deal On 4th Ultium Battery Plant Not Certain

According to unofficial reports, there might be a different battery partner.

Ultium Cells LLC Battery Plant in Warren, Ohio

Mark Kane

By: Mark Kane

Jan 23, 2023 at 12:48pm ET

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General Motors' electrification strategy includes building four lithium-ion battery plants in the United States, under the Ultium Cells joint venture with LG Energy Solution. Three projects are underway (one completed and two under construction), but the fourth one is not yet decided.

According to Automotive News, undisclosed unofficial sources indicate that GM and LGES might resign from the fourth battery factory.

"The automaker has not been able to reach an agreement with LG Energy Solution on a fourth U.S. battery plant planned for their Ultium Cells joint venture, according to multiple media reports Friday. A source with knowledge of the discussions confirmed the reports to Automotive News."

We are not sure why would GM and the South Korean battery manufacturer would not continue to expand their joint venture. The article refers to The Wall Street Journal, which mentions disagreement "on how fast production should begin at the Ohio plant as well as on how plant employees should proceed with efforts to unionize."

GM obviously will need more lithium-ion battery cells to achieve its goal of 1 million electric cars annually in North America by 2025.

The first factory started operations in 2022 (the target output to be 40+ GWh annually). The next two plants - in Spring Hill, Tennessee and in Lansing, Michigan - to be ready in late 2023 and in Q3 2024 (both with a target of 50 GWh annually).

The site in Tennessee appears to be in a pretty advanced stage of construction:

The fourth plant was expected to be located in New Carlisle, Indiana, but it has been "shelved indefinitely," according to The Wall Street Journal (via Automotive News).

A GM spokesman said in a statement that the fourth battery cell plant in the US is part of the company's plan (no change here):

"We’ve been very clear that our plan includes investing in a fourth U.S. cell plant, but we’re not going to comment on speculation,"

Assuming that GM must secure the right supply of batteries, the fourth battery plant might be built in partnership with a different battery supplier. And that's what one of the sources indicates:

What do you think?

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"A fourth factory likely will not happen with LG but could proceed with another partner, the source said."

Well, it's a fresh report, so let's wait and see whether there will be some business changes related to the Ultium Cells joint venture.