Mary Barra, president and president of GM, speaks during an “EV Day” on March 4, 2020 at the company’s technology and design campus in Warren, Michigan, a Detroit suburb
GM
General Chem and LG Chem of South Korea will invest more than $ 2.3 billion at a second U.S. battery cell plant in electric vehicles in Tennessee, the companies announced Friday.
The plant of its joint venture Ultium Cells LLC will serve to support the production of the upcoming GM Cadillac Lyriq crossover and other future vehicles at a nearby assembly plant.
The supply and production of battery cells are crucial for automakers that pivot toward electric vehicles. The joint venture for the new plant, while the first is still under construction in Lordstown, Ohio, stresses this.
Construction of the facility of approximately 2.8 million square meters will begin immediately. The plant is expected to open by the end of 2023 and create 1,300 jobs, the companies said.
“The addition of our new Ultium battery cell plant in the United States with our joint partner LG Energy Solution is another important step in our transition to a fully electric future,” said Mary Barra, Director GM, in a statement.
The announcement comes amid a 100-day review ordered by U.S. President Joe Biden of the supply chain for advanced batteries, pharmaceuticals, critical minerals and semiconductors. He ordered the overhaul amid a continuing global shortage of semiconductor chips that significantly affected U.S. car production in 2021.
GM confirmed last month that it was evaluating a second location in the U.S. to produce battery packs for electric vehicles with LG. Reuters reported details of the announcement on Wednesday.
LG Energy Solution President and CEO Jong Hyun Kim said the new facility will allow companies to “build strong, stable supply chains based in the United States that enable from research, development and production of products up to the acquisition of raw components “.
Some analysts, specifically Morgan Stanley’s Adam Jonas, have warned of a potential shortage due to cellular capacity compared to the number of new electric vehicles expected to hit the market in the coming years.
“In our view, GM’s formation of Ultium / Ultium Cells LLC will prove to be a critical point of strategic differentiation that will ultimately drive value creation for shareholders,” he said in a note to investors on Wednesday.
Ultium is GM’s next-generation platform and batteries, which are expected to debut this year on the GMC Hummer EV tablet. The first vehicles are not expected to include Ultium battery cells from the Ohio plant under construction.
An undated photograph shows the new Cadillac Lyriq, one of the electric vehicles that General Motors Co. said on October 20, 2020 that will begin production at its factory in Spring Hill, Tennessee.
General Motors Co. | Reuters
GM is expected to continue building or converting battery plants in the United States as it becomes an automobile manufacturer offering exclusively electric vehicles by 2035. This includes at least 30 new electric vehicles by 2025 with an investment plant of 27,000. million dollar vehicles during this time period.
Most batteries, such as semiconductors, are manufactured in Asia and Europe. Tesla operates a huge battery and cell manufacturing plant with Panasonic in Nevada. Tesla also told investors in September that it began producing its own cells at a pilot plant in Fremont, California.
GM and LG first announced the joint venture in December 2019.