General Motors (GM.US) phased out battery manufacturing, Samsung SDI wholly took over a joint venture plant in the US
The Zhitong Finance App learned that in the context of the continuing slowdown in demand for electric vehicles, General Motors (GM.US) is further shrinking its battery manufacturing layout. South Korean battery manufacturer Samsung SDI announced on Tuesday that it will terminate the battery joint venture agreement with GM in Indiana, and acquire all of GM's shares to turn the plant into its first independent manufacturing base in North America.
According to Samsung SDI's regulatory documents and statements, the company will acquire 49.99% of GM's shares, thereby wholly owning the joint venture SDI-GM Synergy Cells Holdings. The 680-acre factory, which originally planned to invest 3.5 billion US dollars, is located in New Carlisle, Indiana. It was made a high-profile announcement two years ago, with a target of mass production and employment of 1,600 people in 2027. However, because demand for electric vehicles was weaker than expected, construction progress was delayed. Although the plant has now been completed, no production equipment has been installed, and GM has invested about 300 million US dollars in it.
Samsung SDI admitted in a statement that the decision took into account market changes since the joint venture was announced. In particular, demand for electric vehicles did not grow as much as expected, and the two sides decided to seek other forms of cooperation other than the joint venture. After the transaction is completed, the plant will become Samsung SDI's first independent manufacturing center in North America. It will not only produce batteries for future electric vehicles, but also manufacture batteries for energy storage systems to meet the strong demand in the US energy storage market. However, the original investment plan will be adjusted accordingly, and the specific plan has not yet been finalized.
GM's exit from battery manufacturing is the latest step in the correction of its long-term strategy. Previously, the company had hoped to achieve the goal of selling one million electric vehicles per year in the US by 2025, but actual demand fell far short of expectations. Coupled with the Trump administration's cancellation of the $7,500 federal tax credit for each vehicle, GM has already written off a total of 11 billion US dollars on electric vehicle projects.
GM also sold shares in another planned battery factory to another South Korean partner, LG New Energy, and converted an assembly plant in the suburbs of Detroit to produce large fuel trucks and SUVs. GM's Ultium Cells plant, a joint venture with LG Energy in Tennessee, has also begun shifting some of its production capacity to fixed energy storage batteries.
Despite this, the two parties did not completely “break up.” Samsung SDI revealed on the same day that it has signed an agreement with GM to jointly develop next-generation prismatic batteries with high energy density and fast charging capabilities for GM's future electric models. Samsung SDI said, “This decision reflects the changing market environment while maintaining our strategic relationship with GM. At this plant, we will not only work with GM for the future era of electric vehicles, but also actively respond to the demand for energy storage systems in the US.”
Currently, electric vehicles account for only about 5% of GM's total sales, while hybrid models are performing more strongly in the US market. GM CEO Mary Barra insisted that the company is still committed to developing electric vehicles, but must adjust the pace of production in line with market demand. Currently, GM has invested 35 billion US dollars in autonomous driving and electric vehicle research and development.