General Motors announced today that it was setting up a joint venture with South Korea’s LG Chem to mass-produce batteries for electric cars. The two companies plan to invest a total of $2.3 billion to build a new facility, which will be located in Lordstown, Ohio.
The new plant will essentially become GM’s own Gigafactory, with an annual capacity of more than 30 gigawatt hours. The facility will manufacture battery cells for the 20 new electric vehicles that GM plans to roll out by 2023, executives said. That includes a new EV from Chevy that is set to be released next year and a battery-electric pickup truck by late 2021.
The new plant will essentially become GM’s own gigafactory, with an annual capacity of more than 30 gigawatt hours
GM says the new joint venture will create 1,100 new jobs in Lordstown, where the automaker made the controversial decision earlier this year to close one of its car manufacturing plants. That move set off an acrimonious contract negotiation with the United Automobile Workers, sparking the first nationwide strike against GM in half a century, and it even made the automaker a target for President Trump. GM eventually settled its contract with the union and later sold the factory to Lordstown Motors, an EV startup.
“I think this is a critical juncture in our path to create an all-electric future,” GM CEO Mary Barra said in a press conference on Thursday.
Barra wouldn’t commit to giving priority for new positions at the battery plant to those workers who lost their jobs when the previous factory closed, noting that will have to be worked out by the joint venture with LG Chem. Barra also acknowledged that GM was receiving taxpayer-funded incentives from the state of Ohio for the creation of the new plant, but she wouldn’t reveal the exact amount.
LG Chem is a major supplier of lithium-ion batteries to automakers like Audi, Mercedes-Benz, and their respective parent companies Volkswagen Group and Daimler. Many of these automotive giants have plans to either build their own battery factories in the future or partner with suppliers to build batteries together, like Tesla does with Panasonic. But until those factories are built, they’re at the mercy of suppliers like LG Chem.
The joint venture is certainly a coup for GM in the effort to build affordable, mass-market EVs. The South Korean company said earlier on Thursday that it would invest $916 million in its US subsidiary by 2023 to set up the joint venture with GM, according to a Reuters report.
GM hasn’t released a new EV since the Chevy Bolt in 2016. The company plans on turning Cadillac into its leading EV brand, which it hopes will help it catch up to other automakers in the luxury market. Over the last year, Audi, Mercedes-Benz, Jaguar, and BMW have introduced high-end electric vehicles intended to compete with Tesla’s Model S and X.