This file photo provided by LG Energy Solution shows its domestic plant in Ochang, North Chungcheong Province. (Image courtesy of Yonhap)
SEOUL, Dec. 3 (Korea Bizwire) — LG Energy Solution Ltd. (LGES), South Korea’s leading battery maker, said Tuesday it is considering buying General Motors Co.’s stake in their joint venture battery plant in Michigan.
“The company is considering acquiring the Ultium Cells JV 3 plant in Lansing, Michigan, to effectively operate its U.S. plants and maximize the Michigan plant’s utilization rate,” LGES said in a statement.
The JV plant with GM is being built in Michigan, with an aim to begin operations next year.
GM also announced its plan to sell its stake in the Lansing plant to partner LGES as it adjusts its electric vehicle plans amid a slowdown in EV sales.
“We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner. When completed, this transaction will also help LGES meet demand by leveraging capacity that’s nearly ready to come online, and it will make GM even more efficient,” GM Chief Financial Officer Paul Jacobson said in a statement released by the Detroit carmaker.
The deal is expected to close in the first quarter of next year. GM expects to recoup its investment, reportedly valued at US$1 billion.
The Ultium Cells LLC JV between LGES and GM currently operates its No. 1 plant in Ohio and No. 2 plant in Tennessee.
The proposed transaction will not change GM’s ownership interest in Ultium Cells LLC. GM will continue to leverage the Ultium Cells plants in Ohio and Tennessee to meet growing demand for its EVs, the GM statement said.
The announcement comes amid uncertainties about the future of EV battery production and consumer tax credits in the U.S., the world’s most important automobile market.
President-elect Donald Trump’s transition team has announced plans to scrap the Joe Biden government’s $7,500 consumer tax credit for EV purchases.
(Yonhap)
