General Motors Co. is still planning a fourth battery plant and even more beyond that despite the reported breakup with supplier and partner LG Energy Solution.
GM and LG Energy Solution through their Ultium Cells LLC joint venture initially planned to have four U.S. battery cell manufacturing plants together. Last week, the Wall Street Journal reported and The Detroit News confirmed that the companies were no longer moving forward together on the fourth plant.
GM CFO Paul Jacobson, on a Tuesday earnings results call, said the automaker's fourth battery cell manufacturing center is "very much on track," and he noted capacity has been expanded at two other planned plants with LG Energy Solution. The first Ultium Cells plant is open in northeast Ohio. An Ultium Cells plant in Spring Hill, Tennessee, will open later this year and a third plant under construction in Delta Township near Lansing will open in 2024. GM and LG had been considering a site in New Carlisle, Indiana, for the location of another Ultium plant.
"We're going to have far more than four plants as we go through this journey," Jacobson said. "So this is a pretty ordered approach over time."
But Jacobson wouldn't specify what company GM would be partnered with on the fourth battery plant and others following that.
"I'm not going to comment on our partnership strategy," Jacobson said. "What I will tell you is we've got a great relationship with LG. We're focused on scaling up cell production at plant one and working well together."
GM will need the cells from the Ultium plants to meet its EV expectations. The automaker intends to make 400,000 EVs by the first half of 2024 and 1 million annually in 2025. GM is launching the electric Chevrolet Silverado this year, as well as the Equinox and Blazer. Yesterday, GMC announced it had launched production of the Hummer EV SUV at Factory Zero Detroit-Hamtramck Assembly Center.
"We'll obviously be at a significantly higher run rate in the back half of this year than what we're starting and it's really all indexed to cell capacity," Jacobson said. "As we ramp up Lordstown and continue to move forward on plants two and three, you're going to see volumes increase pretty significantly over that time period."
Meanwhile, GM has been building up its battery supply chain to make the Ultium cells. On Tuesday, the automaker and Lithium Americas Corp. said they plan to jointly develop the Thacker Pass mine in Nevada, which is the largest known source of lithium in the U.S. and the third largest in the world.
Under the agreement, GM is making a $650 million equity investment in Lithium Americas. Lithium Americas, which has lithium production projects in Argentina and the U.S., expects the lithium extracted and processed from the project can support production of up to 1 million EVs a year.
The lithium carbonate from Thacker Pass will be used in GM's proprietary Ultium battery cells. Lithium is a key material in lithium-ion batteries.
"GM has secured all the battery material we need to build more than 1 million EVs annually in North America in 2025 and our future production will increasingly draw from domestic resources like the site in Nevada we're developing with Lithium Americas," GM Chair and CEO Mary Barra said in a statement. "Direct sourcing critical EV raw materials and components from suppliers in North America and free-trade-agreement countries helps make our supply chain more secure, helps us manage cell costs, and creates jobs."
GM's investment will occur in two tranches. Funds from the first investment will be held in escrow "until certain conditions are met, including the outcome of the Record of Decision ruling currently pending in U.S. District Court," GM said. The court will be making a decision over a land dispute. The escrow release should occur no later than the end of 2023.
The second investment should be made into Lithium Americas' U.S.-focused lithium business following the separation of its U.S. and Argentina businesses, GM said.
Production at Thacker Pass should start in the second half of 2026. In connection with the closing of its first tranche investment, GM says it will receive exclusive access to Phase 1 production through a binding supply agreement and has the right of first offer on Phase 2 production.
Lithium Americas expects Thacker Pass to create 1,000 jobs in construction and 500 in operations.
