LG Energy Solution is purchasing General Motors’ stake in their joint venture battery plant in Michigan for approximately 3 trillion won ($2.2 billion), taking full ownership of the nearly completed facility. The transaction is expected to close in early 2025, with GM recouping its investment in the facility while maintaining its interest in the broader Ultium Cells joint venture that operates plants in Ohio and Tennessee.
Toyota is reportedly among the potential customers for batteries from the Michigan plant, aligning with LG Energy Solution’s 20GWh annual supply agreement signed with the Japanese automaker last year. The Korean battery maker expects to minimize investment burden by acquiring the existing facility rather than constructing new plants.
The acquisition comes amid what industry participants call an “EV chasm” – a temporary slowdown in electric vehicle demand that has prompted manufacturers to adjust strategies. LG Energy Solution has been implementing a rebalancing approach, converting some EV production lines to energy storage system (ESS) production at facilities in Michigan and Poland while temporarily halting construction of a planned ESS plant in Arizona.
The company has recently secured significant ESS contracts, including a partnership with Polish state-owned power company PGE and a five-year, 4GWh supply agreement with Delta Electronics for residential storage systems.
“Once the current crisis passes, the true winner will emerge,” LG Energy Solution President Kim Dong-myung stated at a recent shareholders’ meeting, emphasizing the company’s focus on enhancing competitiveness during the market slowdown.
