GM considers building second U.S. battery plant with LG Chem

GM and LG Chem are likely to build the plant in Tennessee

  
Image used for illustrative purpose. Employees work on Baojun RS-5 cars at a final assembly plant operated by General Motors Co and its local joint-venture partners in Liuzhou, Guangxi Zhuang Autonomous Region, China, February 28, 2019.

Image used for illustrative purpose. Employees work on Baojun RS-5 cars at a final assembly plant operated by General Motors Co and its local joint-venture partners in Liuzhou, Guangxi Zhuang Autonomous Region, China, February 28, 2019.

REUTERS/Aly Song

WASHINGTON- General Motors Co said Thursday it is considering build a second battery factory in the United States with South Korean joint-venture partner LG Chem .

The largest U.S. automaker confirmed it is "exploring the feasibility of constructing a second, state of the art battery cell manufacturing plant in the United States" with LG's battery unit LG Energy Solution, via its Ultium Cells LLC joint venture.

GM said it hopes to have a decision by June.

GM and LG Chem are likely to build the plant in Tennessee and if finalized is expected to be near GM's Spring Hill assembly plant, two people briefed on the matter said. It would similar in scope to its $2.3 billion joint venture battery plant in Lordstown, Ohio under construction, the sources said.

The announcement came a day after the disclosure that the U.S. Transportation Department will analyze the impact of an electric vehicle battery trade ruling against SK Innovation Co Ltd on President Joe Biden's green transportation goals in an ongoing trade fight with LG Chem.

LG Chem's battery unit, LG Energy Solution, said in a statement that it was in talks to make further investments with GM, but could not disclose the specifics.

"LG Energy Solution is also planning additional capacity expansion for other global OEMs (original equipment manufacturers) located in the U.S.," it said.

GM and LG Chem's vehicle battery-cell joint-venture plant in Ohio will be on of the world's largest battery facilities.

The plant, being built near GM's closed assembly plant in Lordstown, will accelerate the automaker’s plan to introduce 30 new electric vehicles (EVs) globally by 2025.

GM Chief Executive Officer Mary Barra has said the company wants to exceed its prior target of annual sales of 1 million EVs in the United States and China by 2025.

Most battery manufacturing is currently concentrated in Asia and Europe, while Tesla Inc largely controls most of U.S. battery production.

(Reporting by David Shepardson in Washington, Rachit Vats in Bengaluru and Heekyong Yang in Seoul; Editing by Aditya Soni and Nick Zieminski) ((Rachit.Vats@tr.com; within U.S. +1 646 223 8780, outside U.S. +91 80 61822828; Reuters Messaging: rachit.vats.thomsonreuters.com@reuters.net))