General Motors Company (NYSE:GM) and Samsung SDI (KS:006400) announced Tuesday that they plan to invest more than $3 billion to build a new battery cell manufacturing plant in the United States with a targeted to begin operations by 2026.
Reuters reported in January that GM and LG Energy Solution (KS:373220) would not move forward with a fourth U.S. battery manufacturing plant. GM and LG Energy are building a $2.6 billion plant in Michigan, set to open in 2024, one of three joint venture Ultium Cells LLC plants.
According to unnamed sources at CNBC, the new GM Samsung SDI plant is expected to cost more than the Michigan battery plant, but no location will be immediately announced. However, the number of new jobs in construction and operations is expected to number in the thousands.
"GM's supply chain strategy for EVs is focused on scalability, resiliency, sustainability and cost-competitiveness. Our new relationship with Samsung SDI will help us achieve all these objectives," said GM Chair and CEO Mary Barra. "The cells we will build together will help us scale our EV capacity in North America well beyond 1 million units annually."
"It is a great pleasure to take the very first step to create a long-term industry-leading partnership with GM in the U.S. EV market," remarked Samsung SDI President and CEO Yoon-ho Choi. "We will do our best to provide the products featuring the highest levels of safety and quality produced with our unrivalled technologies to help GM strengthen its leadership in the EV market."
The companies plan to jointly operate the facility, and it is projected to have production lines to build nickel-rich prismatic and cylindrical cells. The plant will have more than 30 GWh of capacity and will bring GM's total U.S. battery cell capacity to about 160 GWh when it is at full production.
According to GM executive vice president Doug Parks, the new joint will leverage the capital and technology of both companies to create new competitive advantages for GM.
"We will continue to scale production and optimize the chemistry of our pouch cells for performance, range and cost using new approaches pioneered at GM's Wallace Battery Center and by our technology partners," he said. "The introduction of new cell form factors will allow us to expand into even more segments more quickly and integrate cells directly into battery packs to reduce weight, complexity and costs. With multiple strong cell partners, we can scale our EV business faster than we could be going it alone."
Shares of GM are up 2.80% in premarket trading on Tuesday.