GM to form new joint venture to produce critical materials for EVs
Production is now set to begin at the former Detroit-Hamtramck assembly plant, less than two years after GM announced the massive $2.2 billion investment to fully renovate the facility to build a variety of all-electric trucks and SUVs.
Photo by Jeffrey Sauger for General Motors
DETROIT – General Motors plans to form a new joint venture with a South Korean chemical company to produce the critical materials needed for EV batteries — a significant move to control its supply chain and lessen the chances of disruptions in the future.
The Detroit automaker on Wednesday said it signed a non-binding term sheet with Posco Chemical to create the joint venture and expects to execute definitive agreements soon.
Shares of GM were up by 4% during Wednesday morning trading to about $60.30 a share.
The companies plan to open a new facility in North America in 2024. GM said the plant will process critical battery materials known as Cathode Active Material, or CAM, for GM’s electric vehicles.
CAM represent about 40% of the cost of a battery cell, the automaker said. GM’s new batteries use cathodes made of nickel, cobalt and other materials.
GM and other automakers are scrambling to integrate and onshore supply chains for electric vehicle batteries to reduce costs and lower risks of supply chain disruptions.
The Biden administration also has urged companies to bring work to the U.S. following an ongoing global shortage of semiconductor chips – mainly supplied from Asia – causing massive shutdowns of factories.
The automaker declined to release specific details such as cost or the location of the planned facility, which will supply the materials to announced battery plants for GM in North America, ahead of the definitive agreement being signed.
“This is going to be pretty significant investment for both GM and Posco,” Doug L. Parks, executive vice president of global product development, purchasing and supply chain, told media during a call Wednesday.