General Motors Sells Stake in Michigan Battery Plant to LGES as Part of EV Strategy Realignment

GM Shifts Focus Amid Slowing EV Demand
General Motors (GM) is selling its stake in the $2.6 billion Michigan battery plant to its longtime partner, LG Energy Solution (LGES), as part of a strategic shift in its electric vehicle (EV) production strategy. The sale, which is expected to close by the first quarter of 2025, reflects GM’s adjustment to a challenging EV market. The decision follows a reduction in GM’s 2024 EV production forecast, driven by slowing consumer demand for electric vehicles due to high costs and insufficient charging infrastructure. The move will allow GM to better align its investments with current market dynamics while freeing up resources to respond more flexibly to evolving EV trends.

Strategic Divestiture to Maintain Flexibility and Focus on Key Areas
By selling its stake, GM aims to recoup its initial investment and focus on other aspects of its business. The company has cited external market conditions as contributing factors to the decline in demand for EVs, including higher vehicle prices and limited infrastructure to support the growing number of electric vehicles. GM’s decision aligns with its broader strategy to pivot its EV production plans, ensuring a more adaptable approach as the company navigates these challenges. This divestiture is also part of GM’s effort to streamline operations and make more targeted investments as it refines its EV manufacturing goals.

Strengthening Battery Technology Partnerships with LGES
Alongside the sale, GM is deepening its collaboration with LGES to develop next-generation prismatic-style battery cells. These advanced batteries are designed to be lighter and more cost-efficient than traditional pouch-style cells, making them an important part of GM’s future EV strategy. The prismatic cells’ compact design could provide a significant advantage in terms of both cost and energy density, offering more competitive options for GM’s EV lineup. The two companies will focus on producing these new batteries at GM’s Ultium facilities in Warren, Ohio, and Spring Hill, Tennessee, which are already engaged in producing pouch-style batteries. This enhanced partnership with LGES signals GM’s continued commitment to innovation in battery technology and its long-term goals for EV growth.