General Motors is set to transfer its stake in a Michigan battery plant to LG Energy Solution, marking a significant shift in its electric vehicle strategy.
At a Glance
- GM is selling its share of a battery plant in Lansing, Michigan, to LG Energy Solution
- The nonbinding agreement is expected to be finalized by the end of Q1 2025
- GM anticipates recovering $1 billion from its investment in the Lansing factory
- The plant currently employs nearly 100 workers, with plans to expand to about 1,700
- EV sales growth is slowing, with a 7.2% increase through September compared to 47% in 2023
GM’s Strategic Shift in EV Manufacturing
General Motors (GM) is making a strategic pivot in its approach to electric vehicle (EV) manufacturing by agreeing to sell its stake in a battery production facility in Lansing, Michigan, to LG Energy Solution. This move comes as the automotive giant reassesses its role in the EV supply chain amid changing market dynamics.
The agreement between GM and LG is nonbinding, with plans to finalize the deal by the end of the first quarter of 2025. While financial details have not been disclosed, GM expects to recover approximately $1 billion from its investment in the Lansing factory. This recovery could provide GM with additional capital to focus on its core automotive operations and EV development.
GM sells stake in Ultium Lansing battery plant to partner LG Energy Solution https://t.co/6rnQWVntJH
— The Detroit News (@detroitnews) December 2, 2024
Impact on Employment and Production
The Lansing battery plant currently employs nearly 100 workers, but there are ambitious plans to expand the workforce to about 1,700 employees once the facility is fully operational. This expansion could bring significant economic benefits to the local community, potentially offsetting concerns about job security following GM’s divestment.
Despite this transfer, GM will continue to rely on joint venture operations in Warren, Ohio, and Spring Hill, Tennessee, for its battery supply. This diversified approach to battery sourcing suggests that GM is not completely divesting from battery production but rather optimizing its manufacturing strategy.
EV Market Challenges and GM’s Response
The U.S. automotive industry is experiencing a slowdown in EV and battery manufacturing due to decelerating EV sales growth. New EV sales in the U.S. increased by only 7.2% through September, a significant drop from the 47% increase seen in 2023. However, EV sales in 2024 are still projected to surpass last year’s record, with EVs accounting for 7.9% of new vehicle sales.
GM sells Lansing battery plant stake to LG https://t.co/5jfXLjxbB0
— Axios (@axios) December 2, 2024
In response to these market challenges, GM has taken several cost-cutting measures. The company eliminated 1,000 positions in November to reduce expenses and boost EV sales. Additionally, approximately 5,000 GM executives and employees accepted voluntary buyouts last year to prevent widespread layoffs. These actions reflect GM’s efforts to streamline operations and maintain competitiveness in a rapidly evolving automotive landscape.
Looking Ahead: GM’s EV Future
Despite the increase in EV sales, GM is expected to incur losses on EVs into 2025. However, the company’s EV profitability is on the rise due to the production of battery cells in the U.S. in collaboration with LG Energy Solution. This partnership highlights the importance of strategic alliances in navigating the complex and capital-intensive world of EV manufacturing.
