General Motors is eyeing a site in Spring Hill, Tennessee, to build a new multibillion-dollar battery factory with its partner LG Energy Solutions, the battery-making operation at LG Chem.
GM confirms it is looking at building a second battery factory beyond the one it is presently building in northwest Ohio near its former Lordstown Assembly plant, which GM closed in 2019 and later sold to electric truck maker Lordstown Motors.
“General Motors and LG Energy Solutions via the Ultium Cells LLC joint venture are exploring the feasibility of constructing a second state-of-the-art battery cell manufacturing plant in the United States,” said Dan Flores, GM spokesman. “We hope to have a decision on the potential project in the first half of 2021.”
Spring Hill, Tennessee
GM will not comment on the various locations company leaders are considering for a second plant.
But a spokesman for LG said the company is planning more battery plants in the United States with GM.
“We can’t comment on the specifics without customer’s consent, but we’re under discussion to make further investments with GM,” said Bill McQuillen, LG spokesman, in an email. “To fulfill the EV battery demand in the U.S., LG Energy Solutions is also planning additional capacity expansion for other global manufacturers located in U.S. as well.”
A person familiar with the project, who asked to not be identified because there is no authorization to discuss the matter with the media, said GM and LG are discussing tax incentives with the local leaders in Maury and Williamson counties in Tennessee as well as state officials.
Spring Hill is in Maury and Williamson counties and GM already has Spring Hill Assembly, where it builds the Cadillac XT5, XT6 and GMC Acadia SUV.
GM has said the new Cadillac Lyriq all-electric SUV will be the first EV produced at Spring Hill. It is expected to go on sale in the first quarter of next year. The Wall Street Journal first reported that GM was eyeing Tennessee to build a second battery factory.
“GM has said they will build EVs at Spring Hill so it makes sense to build a battery factory there,” said Sam Abuelsamid, principal analyst at Guidehouse Insights in Detroit. “Batteries are heavy and bulky and there is risk in transporting them, so what we’ll see going forward is battery assembly will be done near where the EVs are being built, within a few hours drive to the assembly plants.”
The person familiar with the project said GM and LG would invest about $2.2 billion in the battery factory near Spring Hill Assembly. They are developing “a study to secure local and state tax incentives to build there.”
More factories in Michigan?
Because GM will position its battery plants near where it builds its EVs, Michigan very possibly could get a battery factory in the future, Abuelsamid said.
“LG Chem already has a plant of its own in Holland, Michigan, so that’s one source that could expand to supply Ultium batteries,” Abuelsamid said. “When they originally set up that plant they had enough land there for three factories. Their plan in 2012 or 2013, when they started production, was to scale up as EV demand grew. They’ve done some expansion there, but certainly have room for more.”
GM’s Flores declined to comment on GM’s plans in Michigan.
But Abuelsamid said if GM expects “to get to 100% EV sales by 2035 or even a million a year in 2025, which is what they talked about recently, they will absolutely need more battery capacity.”
In GM’s fourth-quarter earnings call last month, CEO Mary Barra said given the EV sales volume GM expects, it is critical GM have adequate supply of batteries.
“It’s one of the reasons why we’re investing in our own cell manufacturer,” Barra said. “There’s more coming than what we’ve announced already. So we want to be in control of our own destiny, not only from making sure we have the ability to have the cells that we need but also to work on cost improvements and technology improvements.”
Abuelsamid said GM could build an additional battery factory elsewhere in the Midwest to supply GM’s other assembly plants in Michigan and its assembly plant in Fairfax, Kansas.
GM has said it plans to produce the EV600 electric delivery van at its Ingersoll, Ontario, plant, starting later this year. A new battery plant in Michigan or southwest Ontario could feed into that, Abuelsamid said.
“There is potential to expand at Lordstown too,” Abuelsamid said. “It’s a relatively rural area and likely room to buy more land if needed. It all comes down to the tax breaks.”
1,100 jobs
GM’s second battery plant intended for Tennessee will be similar in size and scope to the one GM and LG are building in Lordstown. That is due to open in the first quarter of 2022.
GM has said that plant will eventually supply the batteries to Factory ZERO in Detroit and Hamtramck. Factory ZERO is under construction and will starting making the GMC Hummer electric pickup late this year. GM plans to build about five EVs there but has identified only the Hummer and the Cruise Origin self-driving car.
In Lordstown, GM and LG are spending $2.3 billion to build the 2.5 million-square-foot battery plant. GM has said it will eventually employ about 1,100 people there and it has started hiring.
A similar factory and employment base would exist in Spring Hill if the joint venture to build a factory there goes forward, the person familiar with the project said. It would likely take a couple of years to build.
The UAW did not have an immediate reaction to GM building a second battery plant, but joint ventures are outside of the current UAW’s contract with GM. The new factories would need to be organized by the union under a separate and new contract.
“Battery cell manufacturing is very capital intensive,” Flores said. “But through our joint venture with LG Energy Solutions, we’re involved in a very important component in our all-electric future.”
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Contact Jamie L. LaReau at 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.