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GM to sell stake in Indiana EV battery venture to Samsung
Samsung will buy GM’s 49.99% stake in the venture and operate it as a wholly owned entity
(Matt Rourke/Associated Press)
Key Takeaways:
- General Motors agreed to sell its 49.99% stake in a planned $3.5 billion Indiana battery plant to Samsung SDI, which will operate it alone.
- The sale marks GM’s continued pullback from EV manufacturing as demand lagged expectations, following $11 billion in EV writedowns and other battery project changes.
- Samsung SDI plans to use the Indiana site for EV and energy storage batteries, while both companies will continue developing next-generation EV battery technology.
General Motors Co. will sell its half of a planned $3.5 billion electric vehicle battery joint venture in Indiana to partner Samsung SDI Co. in a further retreat from electric cars.
Samsung SDI will buy GM’s 49.99% stake in the venture and operate it as a wholly owned entity, the South Korean battery maker said in a statement Aug. 11, confirming an earlier Bloomberg News report.
The 680-acre property in New Carlisle, Ind., will be Samsung SDI’s first stand-alone manufacturing hub in North America, and will also produce energy storage cells to cater to surging demand, it said.
Separately, both companies have clinched an agreement to jointly develop next-generation prismatic EV batteries featuring high energy density and fast-charging capabilities for GM’s future lineup, Samsung SDI said.
“This decision reflects changing market conditions while preserving our strategic relationship with GM,” Samsung SDI said in the statement. “At this plant, we will sustain our joint efforts with GM for the future EV era while actively addressing U.S. ESS demand.”
Samsung SDI shares fell as much as 4.8% following the announcement.
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(Samsung SDI)
GM’s move away from battery production is the latest in a long pullback by the automaker, which had hoped to be selling 1 million EVs a year in the U.S. by now. Despite a huge push by GM and other companies, EV demand has fallen short of expectations as American consumers demurred on plug-ins and the Trump administration removed federal sales incentives that could have helped demand.
As a result, GM has taken $11 billion in writedowns for its EV programs, sold back its share of one planned battery plant to another South Korean partner, LG Energy Solution, and converted an assembly plant in suburban Detroit to make large trucks and SUVs that burn gasoline.
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The Ultium Cells venture jointly owned by GM and LG Energy Solution in Tennessee has also started making cells for stationary energy storage.
The Indiana plant was announced just two years ago as an investment between GM and Samsung SDI that would eventually employ 1,600 people and targeted mass production in 2027. But the two companies delayed the project as EV sales stalled.
GM has spent $300 million so far developing the site, which has a completed building but hasn’t yet added any production equipment.
Detroit-based GM has bet $35 billion on self-driving cars and EVs under CEO Mary Barra. Barra has said GM remains committed to developing EVs, but has to build what the market wants. Lately, EVs have accounted for only about 5% of sales, while gasoline-electric hybrids have sold more strongly in the U.S.
