General Motors (GM) announced it has reached a non-binding agreement to sell its stake in the nearly completed Ultium Cells LLC battery cell plant in Lansing, Michigan, to its South Korean joint venture partner LG Energy Solution (LGES). The US automaker said it expects the transaction to be completed in the first quarter of 2025, subject to customary closing conditions.

The decision reflects the slower-than-anticipated growth in the North American battery electric vehicle (BEV) market and growing uncertainty regarding the future of federal BEV incentives under the new government of President-elect Donald Trump. GM said it expects to recoup most of its investment in the US$2.6bn facility, with proceeds from the transaction expected to amount to around US$1bn.

GM confirmed that the sale will not change GM’s ownership interest in the Ultium Cells LLC joint venture with LGES, which also has battery cell manufacturing facilities in Warren, Ohio, and Spring Hill, Tennessee, nor will it affect GM’s future plans for a separate joint venture plant with LGES’ rival Samsung SDI.

LGES, which has a long list of automotive customers in North America, including Hyundai-Kia, Stellantis, Mercedes-Benz, Ford, Honda, and Toyota, will take full control of the plant - which is scheduled to begin operations before the end of 2024.

Paul Jacobson, GM executive vice president and CFO, said in a statement: “Our EV profitability is rapidly improving, thanks in part to our strategic decision to build battery cells in the US with LGES. It will be years before some of our competitors approach this level of performance. We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital-efficient manner. When completed, this transaction will also help LGES meet demand by leveraging capacity that's nearly ready to come online, and it will make GM even more efficient."

The Ultium Cells joint venture has so far supplied battery cells for a number of GM electric and hybrid models, including the Chevrolet Silverado EV, GMC Sierra EV, Cadillac Lyriq, Chevrolet Blazer EV, and Chevrolet Equinox EV, as well as the GMC Hummer EV pickup and SUV.

GM also announced it has agreed to expand its 14-year battery technology partnership with LGES to include prismatic cell development. The automaker said the prismatic cell technology will help it “diversify its supply chain and leverage multiple chemistries and form factors.”

"GM to sell stake in Ultium Cell plant to LGES" was originally created and published by Just Auto, a GlobalData owned brand.