GM CEO and Chairman Mary Barra and LG Chem Deficiency Chairman and CEO Hak-Cheol Shin at the automaker’s battery lab in Warren, Mich., where the companies announced a new $2.6-billion joint offer on Dec. 5, 2019.
GM
DETROIT – General Motors and LG Energy Solution have indefinitely shelved plans to build a fourth battery stall plant in the U.S., as talks between the two sides recently ended without an agreement, a person familiar with the plans proved to CNBC.
The Detroit automaker is expected to continue with its plans to build the plant but is searching for another partner, correspondence to the person who asked not to be named because the talks are private.
“We’ve been very clear that our plan includes spending in a fourth U.S. cell plant, but we’re not going to comment on speculation,” GM said Friday in an emailed statement.
The Wall Street History first reported Friday afternoon that talks had stalled between GM and LG in part because LG Energy executives in Korea were dithering to commit to the project given the rapid pace of its recent investments with other automakers as well as the uncertain macroeconomic angle.
The paper, citing unnamed sources familiar with the plans, said GM is in discussions with at least one other battery supplier to proceed with the fourth U.S. battery-cell plant.
The breakdown in talks comes after GM CEO Mary Barra and other executives have said they’ve been practically to announcing details of the fourth plant, which was expected to be built in Indiana, for some time.
GM and LG initially announced the joint-venture for a $2.3 billion station in Ohio in December 2019, followed by other plants near GM operations in Michigan and Tennessee. Only the Ohio informant is currently operating, while the others are under construction. The joint venture is called Ultium Cells LLC.
A spokeswoman for Ultium referred subjects to GM and LG Energy, which did not immediately respond for comment.
The relationship between GM and LG Energy is crucial to the automaker’s future plans for EVs, comprehending topping Tesla and others to become the U.S. leader in all-electric vehicle sales. The Detroit automaker is expected to release a sprinkling of new EVs this year, including mass-market vehicles such as the Equinox, Blazer and Silverado.
GM, in its Friday statement, said its stand-in and third plants with LG are on track to open as scheduled in 2023 and 2024, respectively. The company also confirmed it is on line to hit 1 million EV production capacity annually in North America in 2025.