GM CEO and Chairman Mary Barra and LG Chem Vice Chairman and CEO Hak-Chol Shin at the automaker’s battery lab in Warren, Michigan, where the companies announced a new $2.6 billion joint venture on Dec. 5, 2019.
DETROIT – General Motors Company and LG Energy Solution have indefinitely postponed plans to build a fourth battery cell plant in the U.S. as talks between the two sides recently ended without an agreement, a person familiar with the plans confirmed to CNBC.
The Detroit-based automaker is expected to continue with plans to build the plant, but is looking for another partner, according to the person, who spoke on condition of anonymity because the talks are private.
“We’ve been very clear that our plan includes investing in a fourth cell plant in the U.S., but we’re not going to comment on speculation,” GM said in an emailed statement Friday.
The Wall Street Journal reported for the first time Talks between GM and LG stalled Friday afternoon in part because executives at LG Energy in Korea were hesitant to commit to the project, given the rapid pace of recent investments with other automakers and an uncertain macroeconomic outlook.
The newspaper, citing unnamed sources familiar with the plans, said GM is in talks with at least one other battery supplier to continue building a fourth battery cell factory in the US.
The breakdown in talks comes after GM CEO Mary Barra and other executives said they had been close for some time to announcing details of a fourth plant expected to be built in Indiana.
GM and LG initially announced a joint venture for a A $2.3 billion plant in Ohio in December 2019, followed by other plants near GM facilities in Michigan and Tennessee. Currently, only the Ohio plant is in operation, the others are under construction. The joint venture is called Ultium Cells LLC.
A spokeswoman for Ultium referred questions to GM and LG Energy, which did not immediately respond to requests for comment.
The relationship between GM and LG Energy is critical to the automaker’s future plans for electric vehicles. including the Tesla top and others to become the U.S. leader in sales of all-electric vehicles. The Detroit-based automaker is expected to launch several new electric vehicles this year, including mainstream vehicles like the Equinox, Blazer and Silverado.
In a statement Friday, GM said its second and third plants with LG are on track to open as planned in 2023 and 2024, respectively. The company also confirmed that it plans to increase production to 1 million electric vehicles per year in North America by 2025.
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