LG·GM, second battery joint venture in the US… Acceleration of’One Million Electric Vehicles’

GM’s electric vehicle platform Ultium. According to foreign media, GM and LG are promoting the construction of a second battery plant in the United States. [사진 GM]

The’battery alliance’ between LG Energy Solutions and General Motors (GM) is accelerating. On the 4th (local time), the Wall Street Journal and other foreign media reported that LG Energy Solutions and GM are pursuing the establishment of a second battery plant in Tennessee, USA, borrowing from GM headquarters officials. Regarding this, an official at LG Energy Solutions said, “It is under review,” suggesting that the business has actually begun. Foreign media and the industry predicted that the business could be developed within the first half of the year.

Last year, GM announced that it will introduce 30 electric vehicles by 2025, and it will invest $27 billion (about 30 trillion won) in the development and production of electric vehicles (EVs) and autonomous vehicles. The second battery factory will be solved in the order of the ‘1 million EV’ project.

Last year, LG and GM established a battery joint venture and are constructing a 30GWh (gigawatt-hour) plant in Rosetown, Ohio, USA. When it is completed by the end of the year, GM plans to supply batteries to the high-performance electric vehicle Hummer EV, which will be introduced next year. Considering that the battery capacity of an electric vehicle in the future is about 60 to 70 kWh (kilowatt hours), this is about 500,000 units.

Therefore, the industry predicted that the second factory will be above this level. The Hummer EV has a capacity of 400kWh, and the Cadillac Lyric, which will be released next year, is also a high-performance electric vehicle and requires a large-capacity battery.

GM’s battery investment focuses on the internalization of batteries (self-production) of automakers. GM, which declared its transition to a complete electric vehicle manufacturer in 2035, is betting on the Ultium system, which encompasses the entire EV process from battery manufacturing to platform. The name of the joint venture is Ultium Cells.

An industry official who requested anonymity said, “GM is using Ultium Cells, a joint venture with LG, as a key factor for future electric vehicle competition.” In that regard, the second plant is also very likely. He added, “If the Ultium battery is stably produced, it will also act as a positive factor for the price competitiveness of electric vehicles.”

From the perspective of LG, it is possible to see the effect of increasing the production scale in the US, which will be a battleground for’electric vehicle war’ following Europe. Also, because it is a joint venture, it is easy to do business in the United States. Immediately after taking office, President Joe Biden signed an executive order to “procur 680,000 federal government vehicles using electric vehicles produced in the United States.” In the contents of the executive order, the proportion of parts made in the US to be used in finished cars was emphasized.

LG Energy Solutions has been operating a battery plant in Holland, Michigan, USA since 2012. It is supplying batteries to GM, Ford, and Chrysler, with a scale of about 5GWh.

Samsung Securities researcher Cho Hyun-ryul said, “The second plant project is expected to be in the site selection stage, and it is understood that incentives are being discussed with multiple states.”

The second joint venture between LG and GM draws attention in that SK Innovation, which is being sued for infringement of battery trade secrets with LG, is in a situation where it will be tied up in the United States.

Earlier, on the 10th of last month, the US International Trade Commission (ITC) raised LG’s hand in a trade secret lawsuit between LG Energy Solutions and SK Innovation, which began in 2019. If President Biden does not veto this, SK Innovation will be banned from producing and importing batteries in the United States for the next 10 years.

However, ITC temporarily suspended the supply ban for Ford and Volkswagen, which have already signed a battery supply contract with SK. However, they nailed that point to 2024 and 2022, respectively, and said, “It gave me time to find another battery supplier.”

Reporter Kim Young-joo [email protected]