General Motors (GM) has sold its stake in an electric vehicle battery plant in the United States to its joint venture partner LG Energy Solution.
GM (NYSE: GM) said it had reached a non-binding agreement to sell the interest in the nearly completed Ultium Cells LLC battery cell plant in Lansing, Michigan, in a transaction expected to close in the 2025 first quarter, subject to conditions.
The vehicle and parts maker said it expected to recoup its investment in the facility, which media reports suggested was about US$1 billion (A$1.5 billion).
GM said the transaction did not change GM’s 50% interest in Ultium Cells LLC, the joint venture with LG Energy Solution which was established to manufacture advanced lithium-ion battery cells for GM's electric vehicles (EVs).
GM will continue to leverage the Ultium Cells plants in Warren, Ohio and Spring Hill, Tennessee to meet growing demand for its EVs while LG Energy Solution will have immediate access to the Lansing facility to begin installing equipment.
Executive Vice President and Chief Financial Officer Paul Jacobson said GM’s EV profitability was rapidly improving due in part to its strategic decision to build battery cells in the United States with LG Energy Solution.
“It will be years before some of our competitors approach this level of performance," Jacobson said in a statement.
"We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner.
“When completed, this transaction will also help LG Energy Solution meet demand by leveraging capacity that's nearly ready to come online and it will make GM even more efficient."
GM shares closed at $55.04, down 1%, capitalising the company at $60.4 billion.