General Motors (GM) is reportedly abandoning a three way partnership battery manufacturing facility with Korean battery producer LG Chem.
GM has been on a tear over the previous 12 months and a half, establishing new battery manufacturing places by way of its subsidiary three way partnership created with LG known as Ultium. However, its fourth manufacturing facility will reportedly now not be pursued, based on leaked info given to Reuters.
According to info launched by Ultium LLC in This fall of final 12 months, the fourth battery manufacturing location of the enterprise can be situated in New Carlisle, Indiana, and are available at an initial cost of $2.5 billion. However, in a remark to the press on the finish of the week, GM specified that “We’ve been very clear that our plan includes investing in a fourth U.S. cell plant, however we’re not going to touch upon hypothesis,” indicating the scenario concerning the plant’s building could also be extra complicated than initially reported.
One important hurdle for GM might be its present ties to LG by way of its battery manufacturing subsidiary Ultium. In the case that GM decides to work with one other battery producer, it stays unclear if Ultium may handle that plant or if it might require its personal administration that might, in flip, work with the brand new provider; be that SK ON, CATL, or every other producer. However, suppose GM will proceed working with LG and set up the fourth location. In that case, the American auto large might must proceed to work by way of a probably arduous negotiation course of.
As for LG, the South Korean battery maker has but to again away from the negotiation desk and launched an announcement on Friday to the Wall Street Journal, saying discussions have been nonetheless ongoing.
As legacy automakers proceed to look to develop their battery manufacturing prowess within the coming years, it’s clear that the partnership mannequin might not all the time be advantageous. And whereas many have appreciated sharing the price of creating these quite a few production locations with battery makers, it’s clear that Tesla’s extra direct vertical method additionally has its deserves. It stays unclear if extra firms will development towards that route sooner or later.
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