Ultium Cells building Michigan battery plant, its third in U.S.

Industry

Published: 26 Jan. 2022, 18:03 Updated: 26 Jan. 2022, 18:15

Ultium Cells building Michigan battery plant, its third in U.S.

Kim Dong-myung, head of advanced automotive battery division at LG Energy Solution, speaks during an investment announcement ceremony held in Lansing, Michigan, Tuesday. [LG ENERGY SOLUTION]

Ultium Cells is investing 3 trillion won ($2.6 billion) in a battery plant in Lansing, Michigan, which will be its third factory in the United States.

Owned 50-50 by LG Energy Solution and General Motors, the joint venture is already building battery factories in Lordstown, Ohio, and Spring Hill, Tennessee. A total of 8.4 trillion won has been committed to the three plants by Ultium.

The two companies announced the investment during a ceremony Tuesday in Lansing, with Kim Dong-myung, head of the advanced automotive battery division at LG Energy Solution, Mary Barra, CEO of General Motors, and Gretchen Whitmer, governor of Michigan, attending.

The 2.8 million-square-foot (260,000 square meter) plant in Michigan is likely to have an annual production capacity of 50 gigawatt-hours (GWh), which is enough to power around 700,000 electric vehicles (EVs) with a range of 500 kilometers.

Ground will be broken this year, with the aim of concluding construction in the second half of 2024. Mass production will start in early 2025.

For the new factory, General Motors and LG Energy Solution are both investing 1.2 trillion won, with the rest of the funding coming from the venture itself.

The venture's first plant, in Ohio, is expected to start mass production this year, while the second plant, in Tennessee, is scheduled to go live next year. The three factories will bring the company's capacity to 120 GWh in total. Batteries made at the Ultium Cells factories will go to General Motors for the manufacturing of EVs.

An estimated 1,700 workers will be employed at the third battery factory, which is being built on land leased from General Motors.

"With a shared vision, General Motors and LG Energy Solution pioneered the EV sector by seizing new opportunities in the market well before anyone else did," Kwon Young-soo, CEO of LG Energy Solution said. "Our third battery manufacturing plant, fittingly located in America's automotive heartland, will serve as a gateway to charge thousands and later millions of EVs in the future."

General Motors has promised 30 global EV models by 2025, and will shift all its vehicles to EVs by 2035.

With the United States being one of the major EV markets along with China and Europe, LG Energy Solution has been making aggressive investments in the country to handle growing demand for the eco-friendly vehicles.

In addition to the partnership with General Motors, LG Energy Solution has signed a memorandum of understanding with Amsterdam's Stellantis to establish a joint venture that will build a battery cell and module factory in North America with a capacity of 40 GWh.

The two companies are currently looking for a site, with the goal of breaking ground in the second quarter. The factory will start operation in the first quarter of 2024.

LG Energy Solution also said it is considering a plan to build its own plant in North America. It would have 40GWh annual production capacity.

LG Energy Solution is the No. 2 EV battery maker in the world, with 20.5 percent of the global market in the January-to-November period last year, according to data from SNE Research, right behind China's CATL, which had 31.8 percent of the market.

The Korean battery maker is set to debut on the Korea Exchange Thursday.

Kim Dong-myung, left, head of advanced automotive battery division at LG Energy Solution and Mary Barra, CEO of General Motors pose for a photo after making their investment plan in building a third battery plant in Lansing, Michigan. [LG ENERGY SOLUTION]

BY SARAH CHEA [chea.sarah@joongang.co.kr]