Sources say GM has abandoned the construction of a joint venture battery plant with LG.
Thank you, Mr. Air, a netizen of CTOnews.com, for your clue delivery! CTOnews.com, January 22 (Xinhua)-- General Motors (GM) will abandon its joint venture battery production plant with South Korean battery maker LG Chemical, Reuters reported.
GM has maintained strong growth momentum over the past year and a half and has established a new battery production base through a joint venture with LG, Ultium Cells LLC. However, according to Reuters, the company will no longer pursue a "fourth production facility".
CTOnews.com has reported that information released by Ultium LLC in the fourth quarter of last year showed that the company's fourth battery production site would be in New Carlisle, Indiana, at an initial cost of $2.5 billion.
It is worth mentioning that GM made it clear this weekend that "our plan is very clear, including investing in a fourth battery plant in the United States." but we will not comment on speculation, suggesting that the situation with regard to plant construction may be much more complicated than originally reported.
According to Reuters, a major obstacle for GM may be its current relationship with LG. If GM decides to work with another battery maker, it is unclear whether Ultium can manage the plant. Whether it's SK ON, CATL, or any other manufacturer, it probably needs to be renegotiated.
Suppose GM is determined to continue to work with LG and build a fourth battery plant. Under such circumstances, the US auto giant may have to go through a very difficult negotiation.
As for LG, the South Korean battery maker said in a statement to the Wall Street Journal on Friday that negotiations were ongoing.
With the positive transformation of traditional car companies, they are bound to seek to expand their battery manufacturing capacity in the next few years. Obviously, the joint venture model may not guarantee smooth sailing. It is not clear whether more companies will move in this direction in the future.
