WSJ “LG Ensol-GM 4th Joint Plant Negotiation Failed”
LG Ensol “Both factories are discussing… nothing has been decided”
Interested in the transfer of EV market leadership, ‘finished vehicle → battery’
▲ LG Ensol-GM, battery plant in Tennessee, USA
A battery plant built by Ultium Cells, a joint venture between LG Energy Solutions and General Motors (GM), in Spring Hill, Tennessee, USA. Mass production starts this year. Providing LG Energy Solutions
There was a local report in the United States that the plan for the fourth battery joint venture (Ultium Cells) between LG Energy Solutions and General Motors (GM) of the United States has collapsed. An analysis has been raised that LG Energy Solutions is holding the initiative in the negotiations. It is interpreted that this may be a symbolic scene in which the weight of the battle for market leadership between finished vehicles and battery makers in the electric vehicle market has begun to tilt toward the battery makers.
The Wall Street Journal (WSJ) quoted a source on the 20th (local time) and said that negotiations for the construction of a joint battery plant between LG Energy Solutions and GM management had ended without an agreement. It is known that GM is negotiating with at least one other joint venture partner candidate, not LG Energy Solutions, to carry out its plan to build a fourth battery plant in the United States. GM said, “We will definitely build a fourth battery plant in the United States to achieve our goal of selling 1 million electric vehicles per year in North America by 2025.”
The WSJ reported that LG Energy Solutions’ lukewarm attitude toward additional US investment was one of the reasons the negotiations broke down. LG Energy Solutions has recently increased its investment in the US by announcing joint venture plans with other automakers such as Stellantis and Honda in addition to GM. There was also an analysis that the recent macroeconomic uncertainty was a factor that made LG Energy Solutions hesitate to make additional investment decisions. Regarding this, LG Energy Solutions said, “The two companies are discussing the Ultium Cells 4th plant, and nothing has been decided in detail.”
According to the domestic battery industry, the dominant analysis is that LG Energy Solutions holds the initiative in negotiations for the fourth joint plant between LG Energy Solutions and GM. GM, which wants stable battery supply, urgently needs to build a 4th factory, while LG Energy Solutions is in a more advantageous position than negotiating for 1st, 2nd, and 3rd factories since it has already secured various customers. An official from the battery industry analyzed, “It seems that the negotiations were delayed as there was no need to focus on investing in GM, and the news of the cancellation was eventually conveyed.”
Last year, LG Energy Solutions announced plans to establish a joint venture (JV) one after another with Honda and Stellantis. Recently, a plan to establish a joint venture with Ford in Turkiye is also being discussed.
Previously, LG Energy Solutions and GM established Ultium Cells, a joint venture for electric vehicle batteries, to respond to the explosive growth of the US electric vehicle market in 2019. Ultium Cells is building its first plant (more than 35GWh) in Ohio and its second plant (more than 35GWh) in Tennessee. The first plant started mass production last year, and the second plant will begin mass production this year. Ultium Cells announced at the end of last year that it would build a third battery plant in Michigan. The two companies plan to expand the production capacity of the third plant to 50GWh.
Reporter Sejong Lee Young-joon