GM to Sell Stake in Michigan Battery Plant to LG Energy Solution

By David Shepardson

WASHINGTON (Reuters) – General Motors announced on Monday its decision to sell its stake in a joint venture battery plant located in Lansing, Michigan, to its partner LG Energy Solution as part of a strategy to reduce its electric vehicle plans.

GM anticipates recovering its investment in the facility, estimated at about $1 billion. The transaction is anticipated to finalize early next year and will not alter GM's ownership stake in the Ultium Cells joint venture, which is responsible for battery operations in Ohio and Tennessee.

The nearly finished Lansing plant is expected to serve a new, undisclosed customer and currently employs nearly 100 people, meeting employment commitments as stated by GM.

"We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital-efficient manner," said GM Chief Financial Officer Paul Jacobson.

LG Energy Solution confirmed that it is evaluating the acquisition of the Ultium Cells plant in Lansing to enhance investment and operational efficiency and optimize operating rates of North American plants.

This announcement comes amidst uncertainty regarding the future of EV battery production and potential consumer tax credits, as President-elect Donald Trump's transition team aims to eliminate the $7,500 credit for electric vehicle purchases, as reported by Reuters this month.

GM has been revising its electric vehicle ambitions over the past year. In June, it reduced its EV production forecast for 2024, and CEO Mary Barra indicated in July that GM would not achieve 1 million EVs in North America by the end of 2025, attributing this to market development challenges. GM also announced a delay in the production of electric pickup trucks at a Michigan plant by an additional year.

Separately, GM and LG Energy Solution are extending their 14-year battery technology partnership to cover prismatic cell development. In August, GM finalized a different agreement with South Korea's Samsung SDI for a battery factory in Indiana that will also focus on prismatic cells, which could contribute to reducing EV costs and weight.