General Motors (GM, Financial) has announced plans to sell its stake in the Michigan-based electric vehicle battery plant, Ultium Cells LLC, to Korean partner LG Energy, expecting to recoup around $1 billion. While the plant will continue to supply batteries to GM's electric vehicles, this decision reflects GM's careful assessment of the current EV market's supply-demand dynamics and future uncertainties. The companies also plan to jointly develop prismatic batteries to enhance efficiency and reduce costs.
Despite growing EV sales, slowed demand and political uncertainties regarding federal EV tax credits have clouded the future outlook. The deal is expected to complete in the first quarter of next year, allowing LG Energy to independently sell batteries produced at the Lansing plant to other automakers as well.
GM and LG Energy will still share 50% ownership of Ultium, which operates battery plants in Ohio and Tennessee. GM aims to align with the EV market efficiently, while LG Energy will leverage added capacity to meet market demand.
