General Motors sells stake in Michigan battery plant to LG Energy Solution

In a significant shift in its strategic alignments, General Motors has announced that it has entered into a nonbinding agreement to sell its share in a nearly completed electric vehicle battery plant located in Lansing, Michigan. This decision comes as part of a larger trend among automakers in the United States, who have been revising their plans for electric vehicle and battery production in response to the slowdown in electric vehicle sales growth compared to the previous year. Although General Motors has invested approximately $1 billion in developing the Lansing facility, the company is optimistic about recouping its investment through this sale. The expectation is that the transaction with LG Energy Solution, a South Korean firm and GM's joint venture partner, will be finalized by the end of March, although the exact financial details remain undisclosed. The recent slowdown in electric vehicle sales has prompted substantial changes across the automotive industry. By September, new electric vehicle sales were reported to have increased by only 7.2%, as compared to a significant rise of 47% in 2023. Despite this deceleration, experts have projected that total electric vehicle sales for the current year may still surpass the previous year’s record, signifying that there remains a strong demand in the market, albeit at a much slower growth rate. General Motors plans to redirect its focus to other factories, specifically in Warren, Ohio, and Spring Hill, Tennessee, where they anticipate continuing production on seven different electric vehicle models currently available in the U.S. The Lansing battery facility, which spans a sprawling 2.8 million square feet, currently employs around 100 workers. However, GM's plans indicate that they aim to increase the workforce to about 1,700 employees once the plant is fully operational. Despite these efforts, the timing for the plant’s official opening has become unclear, raising questions about the future operational capacity of this facility amidst changing market conditions. In addition to the sale, GM also revealed that it will partner with LG to co-develop more advanced prismatic battery cells, which are expected to enhance battery efficiency by storing greater energy in reduced sizes and weights compared to pouch cells that GM has been using. This technological development could potentially lower manufacturing costs and improve the performance of electric vehicles produced by GM in the future.