GM to sell Lansing battery plant stake to LG Energy Solution

General Motors (NYSE:GM ) announced on Monday that it will sell its share of the joint venture battery plant in Lansing, Michigan, to its partner LG Energy Solution. The automaker is adjusting its electric vehicle (EV) strategy and expects to recover its approximately $1 billion investment in the facility.

The transaction is slated to be finalized early next year and will not affect General Motors' stake in the Ultium Cells joint venture, which includes battery plants in Ohio and Tennessee. The Lansing plant, which is nearing completion, will cater to a new, yet-to-be-named client. The plant currently employs nearly 100 people and is on track to fulfill its employment promises.

GM's Chief Financial Officer Paul Jacobson commented on the company's strategy, stating, "We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner."

This development emerges amidst uncertainties regarding the future of EV battery production and consumer tax incentives. There are reports that the incoming administration may seek to eliminate the $7,500 consumer tax credit for electric vehicle purchases.

Over the past year, General Motors has been revising its EV production plans. In June, the company reduced its EV production forecast for 2024. In July, CEO Mary Barra indicated that GM would not hit the target of producing 1 million EVs in North America by the end of 2025 due to slower market development, though she expressed confidence in eventually reaching that goal.

Furthermore, this year, General Motors announced a delay in the production of electric pickup trucks at a Michigan factory by one year.

In a related move, GM and LG Energy Solution will extend their 14-year battery technology partnership to encompass the development of prismatic cells.

Additionally, GM concluded an agreement in August with Samsung SDI (KS:006400 ) for a battery factory in Indiana that will produce prismatic cells, potentially reducing the cost and weight of EVs.

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Source: Investing.com