GM and Samsung finalize deal for a $3.5 billion EV battery plant in Indiana

General Motors and Samsung SDI have finalized a $3.5 billion deal to build an electric vehicle battery plant in Indiana, the South Korean company announced Tuesday. The factory will have an initial capacity of 27GWh, which could go up to 36GWh.

The factory was expected to start production in 2026, but now it is anticipated that batteries won’t start rolling off the line until 2027 at the earliest. Construction at the factory is already underway, the News-Gazette reported.

The deal is a sign that the largest automaker in the US is still committed to scaling up EV production, even as its rivals pullback their investment and cancel models. EV sales are still growing, but some automakers are getting cold feet over their earlier predictions about a much more rapid shift in the industry.

The new factory will be located in New Carlisle, Indiana, a small community outside South Bend, on a 680-acre site. It is projected to create over 1,600 jobs when completed. GM and Samsung will receive incentives from the local community in the form of 100 percent tax abatements for 10 years. In exchange, GM said it would pay a $4.5 million infrastructure fee per year for 10 years to cover costs for sewer extensions, road improvements and new fiber optic cables, according to Detroit News.

Once completed, the factory will produce nickel-rich prismatic and cylindrical cells, which are distinct from the pouch-style packs currently used by GM’s Ultium battery vehicles.

GM is currently building three other battery factories in the US for a total annual capacity of 140GWh: one in Lordstown, OH, which is operational; Spring Hill, TN, which is also in production; and Lansing, Mich. GM switched to Samsung SDI after a recall of its Chevy Bolt electric vehicles equipped with batteries made by LG that were catching fire.

The plant is part of a host of new EV facilities that are expected to come on line in the coming years, partly spurred by tax incentives approved by the Biden administration. Globally, battery production is expected to grow from 95.3GWh in 2020 to 410.5GWh in 2024, according to GlobalData, a data and analytics company.

Ford has said its three battery plants will enable 129GWh a year of production capacity. Volkswagen is building a new gigafactory in Ontario, Canada, in addition to several more around the world for a total capacity of 240GWh. Stellantis is planning a new factory, also in Indiana, which will have an initial annual production capacity of 23GWh. And BMW is aiming to have a new plant in South Carolina with 30GWh of production.