General Motors and LG Chem recently announced plans to mass-produce battery cells for future battery-electric vehicles. Together, the companies will invest up to a total of $2.3 billion through a new, equally owned joint venture company.
General Motors, its subsidiaries and its joint venture entities sell vehicles under the Cadillac, Chevrolet, Baojun, Buick, GMC, Holden and Wuling brands. LG Chem, a Korean chemical company headquartered in Seoul, is a well known lithium-ion battery cell supplier.
The JV will establish a battery cell assembly plant on a greenfield manufacturing site in Northeast Ohio. The state-of-the art plant will use the advanced manufacturing processes all under one roof to produce cells. According to the news release, the plant will be flexible and able to adapt to ongoing advances in technology and materials. It will produce batteries efficiently, with little waste, and will benefit from strong economies of scale throughout the value chain. The JV will be creating more than 1,100 new jobs in the process. Groundbreaking is expected to take place in mid-2020.
The collaboration also includes a joint development agreement that brings together two leaders in battery science to develop and produce advanced battery technologies, with the goal of reducing battery costs to industry-leading levels. This announcement, along with the recent sale of GM’s manufacturing complex in Lordstown, Ohio to Lordstown Motors Corp. for the production of battery-electric trucks, positions Northeast Ohio and the Mahoning Valley as a major hub for technology and electric vehicle manufacturing.
In addition to vertically integrating the manufacturing of battery cells in the U.S., LG Chem will gain access to an experienced workforce. It will also benefit from a dedicated production stream of future EVs from GM’s next generation of battery-electric vehicles, including an all-new battery-electric truck coming in the fall of 2021. This investment builds on GM’s $28 million investment in its Warren, Michigan battery lab announced late last year
“With this investment, Ohio and its highly capable workforce will play a key role in our journey toward a world with zero emissions,” said GM Chairman and CEO Mary Barra. “Combining our manufacturing expertise with LG Chem’s leading battery-cell technology will help accelerate our pursuit of an all-electric future. We look forward to collaborating with LG Chem on future cell technologies that will continue to improve the value we deliver to our customers.”
“Our joint venture with the No. 1 American automaker will further prepare us for the anticipated growth of the North American EV market, while giving us insights into the broader EV ecosystem,” said LG Chem Vice Chairman & CEO Hak-Cheol Shin. “Our long-standing history with General Motors has proven our collective expertise in this space, and we look forward to continuing this drive for zero emissions.”
Mainstream Automakers have shifted their focus to Battery-Electric Vehicles and they are entering into partnerships to secure the supply of batteries. Volvo has signed long-term multi-billion dollar agreements with CATL and LG Chem to supply lithium ion batteries over the next decade. Geely Automotive is also manufacturing EV batteries with LG Chem in China. LG Chem has also signed an agreement to supply electric vehicle (EV) batteries to Volkswagen group in 2018. With this, The Li-ion battery supplier is also has a strategic partnership with Lucid Motors.
Source: Press Release