GM’s latest EV pivot — selling its stake in a nearly completed battery facility

Detroit automaker General Motors (GM) has reportedly closed a deal to offload its stake in a nearly completed U.S. battery plant to LG Energy Solution — another sign of the automaker scaling back on electric vehicles (EVs).

First things first:  The battery plant – being built in Lansing, Michigan in partnership with LG Energy Solution of South Korea – was touted as a pivotal part of GM’s electric vehicle strategy, when construction began on the facility in 2022.  

• The cost of the Lansing battery plant was once reported to be $2.6 billion, according to a Lansing State Journal report.

• And so far — GM has sunk about $1 billion into the factory since construction began on the facility.

• The battery facility is expected to employ roughly 1,700 high-tech workers in the Lansing area when fully operational, which was set for 2025 prior to the recent announcement. 

The financial details of GM selling its stake in LG Energy Solution were not released, but GM said it plans to recoup its investment in the Lansing facility.  

Digging deeper: When first announced, the Lansing battery plant was aimed at supporting the production of battery technology for GM’s battery platform named “Ultium,” which was recently dropped. The automaker’s deal to sell its stake in the facility is one of several moves made by the company in recent months, signaling a shift in its EV strategy.

• GM announced in June that it was slashing its targeted production of its new EVs in 2024 from between 200,000 to 300,000 to between 200,000 to 250,000. 

• The automaker announced in July that it was again delaying electric truck production at its Orion facility in Michigan to late 2025.

Weighing it all: On the surface, GM’s decision to sell its stake in the Lansing battery plant, coupled with some of its other recent moves, might appear to be a sharp turn from the company’s prior position on the viability of EVs. However, it could also be argued that it’s quite the opposite, given some other recent moves GM has made in the sector. 

• GM announced in Oct. that it was investing $625 million in the Nevada lithium mine in a joint venture with the Canadian firm Lithium Americas, bringing the automaker’s total investment in the project to nearly $1 billion.

Looking ahead: Amid news of selling its stake in the Lansing battery plant, GM also announced that it has reached a deal with LG Energy Solution to jointly develop the more efficient prismatic battery cells for electric vehicles.

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