GM entering joint venture to produce EV battery material
21:47, 1 December 2021
General Motors is teaming up with the South Korean company POSCO Chemical in a joint venture to build a factory in North America that will process a key material for GM’s Ultium electric vehicle batteries.
The new facility will produce cathode active material, otherwise known as CAM, which makes up about 40% of the cost of a battery cell. The factory is expected to open in 2024 and will create hundreds of jobs when it does, the companies reported in a press release heralding the deal.
So far, the companies have signed a non-binding term sheet for the deal, but they anticipate executing a definitive agreement soon.
“Our work with POSCO Chemical is a key part of our strategy to rapidly scale U.S. EV production and drive innovation in battery performance, quality and cost,” said Doug Parks, GM’s executive vice president in charge of global product development, purchasing and supply chain. "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.”
GM’s share price traded in a 4.3% range throughout the day, hitting a high of $60.59 late morning and a low of $58.09 mid-afternoon. It was trading at $58.06 at closing.
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POSCO Chemical produces high-capacity Ni-rich cathode materials and low-expansion anode materials for EV batteries.
“We are very pleased to participate in the global battery supply chain project with General Motors,” said POSCO CEO Kyungzoon Min. "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.”
The new factory will supply the material it produces to two electric vehicle battery manufacturing plants GM is building in another joint venture forged with LG Energy Solution. That enterprise, called Ultium Cells LLC, was formed in 2019 to construct a $2.3bn (£1.73bn) facility in Lordstown, Ohio. In April of this year, GM announced it was investing another $2.3bn to construct a second plant in Spring Hill, Tennessee. Plans for two more Ultium Cells factories are in the works.
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