GM is selling its stake in the battery cell plant in Lansing

General Motors will ultimately not own a stake in the Ultium Cells battery plant in Lansing.

On Monday, GM announced it would sell back its investment in the yet-to-be-opened plant to its Ultium Cells joint venture partner LG Energy Solution. The move is consistent with what GM CEO Mary Barra told investors earlier this fall that the company was becoming increasingly cautious in its capital allocation to match production capacity to demand.

Separately, the automaker also announced Monday that it and LG will expand their 14-year battery technology partnership to include new battery cell technology called prismatic cell development. Currently, Ultium Cells makes pouch battery cells, but prismatic cells can store more energy, reduce the weight of electric vehicles, and are more cost-effective because they are easier to manufacture and require fewer components.

“We are focused on optimizing our battery technology by developing the right battery chemistry and form factors to improve electric vehicle performance, increase safety and reduce costs,” said Kurt Kelty, GM vice president of battery cells and packs, in a statement. “By expanding our partnership with LG Energy Solution, we are taking an important step towards these goals.”

Why GM is selling its stake in Lansing

GM is selling back its stake in the Ultium Cells plant in Lansing because it believes it can meet demand for its electric vehicles using its two joint venture battery cell factories: Ultium Cells in Warren, Ohio, and Spring Hill, Tennessee. Cells produced at these plants power 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.

“Our EV profitability is improving rapidly, thanks in part to our strategic decision to build battery cells in the US with LG Energy Solution. It will take years for some of our competitors to reach this level of performance,” GM Chief Financial Officer Paul Jacobson said in a statement. “We believe we have the right cell and manufacturing capabilities to grow capital-efficiently with the EV market.”

GM spokesman Kevin Kelly told the Detroit Free Press that LG Energy will use the capacity at the plant to produce battery cells for another automaker’s electric vehicles. This customer has not been identified. But LG Energy will begin installing equipment for the new automaker immediately, Kelly said.

Kelly said there is no announcement as to when the plant will open under this new agreement, but LG Energy will support GM in its investment. This amount is believed to be around $1 billion.

It is expected that jobs will be created

Ultium Cells Lansing currently employs nearly 100 people, Kelly said. When GM originally announced the plant, it said the plant was expected to create 1,700 jobs once it began operations early next year. A person familiar with the transaction said LG Energy aims to maintain that order number when the plant actually comes online. The person does not wish to be identified because they are not authorized to share this information publicly.

LG Energy Solution spokeswoman Sophia Kim provided the following comment to the Free Press via email: “We are currently negotiating with GM to acquire the facility and will make an announcement once the acquisition is complete. This is part of our strategic goal to further optimize our investments in North America and also address the needs of global automakers.”

GM first announced it would build this plant in January 2022, as part of a larger announcement by GM that it would make a $7 billion investment in four manufacturing facilities across Michigan. As part of that, GM announced it would spend $2.6 billion to build a new battery cell plant as part of its Ultium Cells joint venture in Lansing on a 590-acre site next to GM’s assembly plant in Lansing Delta Township.

Plant construction is nearly complete and LG Energy Solution will immediately have access to the nearly completed Lansing facility to begin installing equipment, Kelly said. The transaction is expected to close in the first quarter, Kelly said. The transaction does not change GM’s ownership of its Ultium Cells joint venture with LG Energy Solution.

“Once completed, this transaction will also help LG Energy Solution meet demand by leveraging capacity that is almost ready to come online, thereby making GM even more efficient,” Jacobson said.

New battery cell technology

Regarding the prismatic cell technology to be developed under the new agreement with LG Energy, Kelly said GM is not disclosing when the prismatic cells will go into production or where they will be manufactured. But they will power future GM electric vehicles as part of the company’s strategy to diversify its supply chain and utilize multiple chemicals and form factors.

He said GM will continue to use Ultium Cells plants in Ohio and Tennessee, which produce pouch battery cells, to meet growing demand for its electric vehicles.

Prismatic cells are flat, rectangular cells with a rigid housing that allows for space-saving storage in battery modules and packs, Kelly said. They store more energy than a pouch cell and are easier to manufacture.

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GM is selling its stake in the battery cell plant in Lansing

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