General Motors will build a new factory in North America as part of an upcoming joint venture with a South Korean chemical manufacturer.
GM said Wednesday it signed a “non-binding term sheet” to create a joint venture with POSCO Chemical. The automaker expects to execute definitive agreements soon, likely by the first quarter of next year, said Doug Parks, GM’s executive vice president of Global Product Development, Purchasing and Supply Chain.
GM and POSCO will then announce a site in North America to build a new factory by 2024 to process key battery materials used in GM’s Ultium electric vehicle platform.
Ultium will underpin and propel all of GM’s future EVs, starting with the 2022 GMC Hummer EV pickup that is being built at Factory ZERO in Detroit and Hamtramck.
“We need to control our own destiny especially when it comes to battery production,” Parks said “The majority of the Ultium platform will be sourced, processed and produced in North America by 2025.”
‘Create hundreds of jobs’
In June, GM said it will build two new battery cell manufacturing plants in the United States by mid-decade in its joint-venture Ultium LLC with LG Energy Solution. Those factories will make the batteries for the Ultium platform. GM has not disclosed the locations.
GM is presently building two other Ultium Cells LLC battery plants. One is in northeast Ohio near GM’s former Lordstown Assembly plant and another is in Tennessee near its Spring Hill Assembly plant, where it will build the 2023 Cadillac Lyriq electric SUV.
The new factory that GM will build with POSCO will process Cathode Active Material (CAM) and feed it to the four Ultium factories. CAM is a key battery material that makes up about 40% of the cost of a battery cell, Parks said.
Until the deal is signed, Parks declined to provide details on how much money GM will invest in the new factory, its location or the exact number of jobs it will create when it opens in 2024.
But he said, “When the plant goes online in 2024, it will create hundreds of jobs. This will be a significant investment by both companies.”
The UAW did not have an immediate comment on Wednesday’s news, but it has previously said it plans to organize workers at the U.S.-located Ultium LLC plants.
Bring EVs to market faster
Because GM will likely position its battery plants near where it builds its EVs, Michigan could get a factory in the future, industry experts have said.
GM’s battery maker, LG Chemalready has a plant in Holland, Michigan, so that’s one place that could expand to supply Ultium batteries, Sam Abuelsamid, principal analyst at Guidehouse Insights in Detroit, previously told the Free Press.
“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,” Abuelsamid said. “They’ve done some expansion there, but certainly have room for more.”
GM is investing $35 billion through 2025 to develop EVs and self-driving cars. It has said it will introduce 30 new EVs globally by mid-decade with plans to deliver more than 1 million annual global EV sales by 2030.
The automaker said its work with POSCO is a key part of the plan to rapidly scale U.S. EV production and drive innovation in battery performance, quality and cost, Parks said.
“We are building a sustainable and resilient North America-focused supply chain for EVs covering the entire ecosystem from raw materials to battery cell manufacturing and recycling,” Parks said.
He said vertically integrating CAM material production secures GM’s supply chain which will help GM accelerate EV production if consumers adopt EVs at a faster pace than what’s currently expected.
Background work
Parks declined to comment on whether the partnership with POSCO would be “50/50 or 80/20” ownership, saying those are details are being worked out and, “we’re fairly close and we’ll have those details when the agreement gets announced in the near future.”
He also declined to provide a figure in terms of GM’s cost savings from processing CAM with POSCO versus buying it from a supplier, other than to say, “we hope to yield significant cost reduction in this space.”
POSCO said the joint venture will help it advance its own research.
“Through close partnership, we will innovate battery materials and contribute to accelerate the adoption of EVs based on our world-class product development, mass production capacity, and raw materials competitiveness,” said Kyungzoon Min, CEO of POSCO Chemical, in a statement.
More:Ford to outsell GM in electric vehicles — but not for long
More:GM invests in outboard motor startup to make all-electric boating
Contact Jamie L. LaReau: 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.