LG Energy Solution (LGES) and General Motor’s (GM) joint venture have decided to slow the construction of their battery plant in Michigan.
In 2022, the two companies formed a joint venture and announced their $7 billion electric vehicle (EV) investment in Michigan. The $7 billion factory would produce EV battery cells and electric pickup trucks.
LGES and GM’s MI battery plant will produce Ultium cells, with a target volume production of 50 GWh. The battery factory was expected to start production in early 2025 with five assembly lines. Only two lines have installed equipment so far, and work on the remaining lines has temporarily stalled.
LG Energy Solution told Bloomberg that it is currently “adjusting the speed of overall investment” and “seeking ways for the flexible operation” of its plants. The South Korean battery supplier also stated that construction on the MI facility will not be suspended.
Besides LGES, a few other South Korean companies have started seeking more flexible operations in the United States. Automakers and EV suppliers are beginning to prepare for a shift in the US car market under a Trump-led administration. Trump announced his intention to end President Joe Biden’s EV mandate, revealing his stance on electric vehicles. Hyundai, for instance, plans to expand its hybrid lineup, anticipating a change in US EV policy.
LGES and GM’s decision with the MI plant may also stem from the slowing demand for electric vehicles.
Despite the current obstacles in their way, LGES and GM were successful with their battery plant in Tennessee, called the Ultium Cells Plant 2. Like the MI plant, the battery facility in TN is expected to have a total production capacity of 50 GWh. In June 2024, Plant 2’s head—Kim Young-deuk—announced that the facility achieved its target yield of over 90% in one month of mass production.
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