Detroit — As General Motors Co. pushes toward an electric future, it's softening the risk of plunging into an uncertain market by getting a partner to shoulder half the investment it needs in battery manufacturing.
Through a joint venture, GM and LG Chem of South Korea are planning a $2.3 billion lithium ion battery-cell plant in northeastern Ohio, near the defunct Lordstown Assembly plant.
By building one of the world's largest battery plants — though it will employ fewer workers than Lordstown Assembly did — GM aims to reduce the cost of building electric vehicles, achieve industry-leading cost levels and make EVs more affordable. The automaker believes that, in turn, can accelerate demand and ensure its other multibillion-dollar investments in EVs pay off.
"What you're hearing from General Motors is a commitment to electric vehicles and to solving customer issues so we can drive adoption," GM CEO Mary Barra told reporters. "And partnering with LG Chem that has tremendous expertise and capability is something that … de-risks the plan."
In the past two months alone, GM has pledged more than $4 billion toward EV manufacturing. It's spending $3 billion to build electric trucks and battery modules at its Detroit-Hamtramck Assembly plant.
That's despite most experts' beliefs that consumers will continue to buy mostly internal-combustion vehicles for at least another decade.
The Ohio plant will have an initial annual capacity of more than 30 gigawatt-hours. Tesla said its Gigafactory 1 in Nevada was the highest-volume operation in the world when it reached an annualized rate of 20 gigawatt-hours in mid-2018.
The battery cells from the Ohio plant will be used in GM's future EVs, including an electric pickup scheduled for release in the fall of 2021. GM has said it plans to introduce 20 EVs globally through 2023 and to sell 1 million EVs annually as of 2026.
The company is wagering billions even as battery-electric vehicle sales make up only 1.7 percent of the U.S. market in 2019, according to J.D. Power sales data through October, up from 1.3 percent a year earlier.