Joint venture aims to reduce battery costs to industry-leading levels
DETROIT — General Motors and LG Chem plan to team up in a new, equally owned joint venture company to mass-produce battery cells for future battery-electric vehicles. The collaboration 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. Together, the companies will invest up to $2.3 billion through the joint venture, GM said in a news release.
The joint venture will establish a battery cell assembly plant on a greenfield manufacturing site in the Lordstown area of Northeast Ohio, creating more than 1,100 new jobs. The plant will have an annual capacity of more than 30 gigawatt hours, with flexibility to expand. Groundbreaking is expected to take place in mid-2020.
General Motors said that the state-of-the art plant will use the most advanced manufacturing processes, all under one roof, to produce cells efficiently, with little waste. The plant will benefit from strong economies of scale throughout the value chain, and will be extremely flexible and able to adapt to ongoing advances in technology and materials.
The joint venture, 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.
“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, in the release. “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.”
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.
“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 and 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.”
This investment builds on GM’s $28 million investment in its Warren, Michigan battery lab announced late last year. It is also in addition to manufacturing investments in Ohio, announced earlier this year, that total approximately $700 million. Those investments will create about 450 jobs in Toledo, Parma, and Brookville, Ohio, the company said.