GM to sell its stake in Michigan battery factory to LGES

General Motors (GM) is selling its stake in a USD 2.6 billion EV battery plant in Michigan to its joint venture partner LG Energy Solution (LGES). 

The automaker expects to recoup its $1 billion investment in the facility. 

The companies have a nonbinding agreement for the sale, which is expected to close by the end of March.

“We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner,” GM Chief Financial Officer Paul Jacobson said in a media release. “When completed, this transaction will also help LG Energy Solution meet demand by leveraging capacity that’s nearly ready to come online and it will make GM even more efficient.” 

GM said the South Korean company would have immediate access to the Lansing facility to start the installation of the equipment.  

The Detroit carmaker said it will rely on joint venture factories in Ohio and Tennessee to supply factories that make seven electric vehicles.  

The slowing down of EV sales has forced many carmakers in the US to rethink or postpone ambitious plans to build EV and battery factories. 

The incoming administration is expected to take a harder line on green initiatives and EV manufacturing. President-elect Donald Trump has previously pledged to end federal EV tax credits worth up to $7,500 for new zero-emission vehicles and $4,000 for used ones.

Meanwhile, GM also announced an agreement with LG to jointly develop prismatic battery cells for electric vehicles.  

“We’re focused on optimizing our battery technology by developing the right battery chemistries and form factors to improve EV performance, enhance safety, and reduce costs,” said Kurt Kelty, GM vice president of battery cell and pack, in a media release. “By extending our partnership with LG Energy Solution, we’re taking an important step towards these goals.”