GM's Strategic Exit: Selling Michigan EV Battery Plant Stake to LG Energy Solution

General Motors (GM) is set to sell its stake in a nearly completed electric vehicle (EV) battery plant in Lansing, Michigan, to joint venture partner LG Energy Solution, the company announced on Monday. This strategic move aligns with GM's long-term plan to maintain its competitive position in the rapidly growing EV market while optimally managing its resources.

The Lansing plant, with a capacity of 35 GWh, was expected to begin operating by the end of this year, but faced delays. The sale to LG Energy Solution, expected to close by the end of March, will not significantly impact GM's production capacity or supply chain for EV batteries. GM will continue to rely on its joint venture factories in Warren, Ohio, and Spring Hill, Tennessee, to supply seven electric vehicles currently on sale in the U.S.

By selling its stake in the Lansing plant, GM expects to recoup its $1 billion investment. This move aligns with the company's "capital efficient" approach, as stated by GM CFO Paul Jacobson. LG Energy Solution, the buyer, will gain immediate access to the facility to begin installation of equipment, expediting the plant's opening and enabling it to meet increasing EV demand more quickly and efficiently.

This transaction also allows GM to extend its 14-year battery technology partnership with LG Energy Solution to include the development of an emerging type of battery cell called prismatic cells. These rectangular cells store more energy and reduce EV weights and costs compared to pouch cells currently used by GM. This extension reinforces GM's commitment to advancing battery technology and enhancing EV performance.



The sale of GM's stake in the Lansing plant is a strategic decision that allows the company to focus on its core competencies while still benefiting from the growing EV market. By leveraging LG Energy Solution's expertise in battery production and technology, GM can maintain its competitive edge without the need to invest additional capital in the facility.

In conclusion, GM's decision to sell its stake in the Lansing EV battery plant to LG Energy Solution is a well-calculated move that aligns with the company's long-term strategy. This transaction enables GM to optimize its resources, extend its battery technology partnership, and maintain its competitive position in the EV market. As the demand for EVs continues to grow, strategic partnerships and acquisitions will play a crucial role in shaping the future of the automotive industry.

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