To further diversify its component suppliers, General Motors (GM) and Samsung SDI said on Tuesday, April 25, that they would spend over $3 billion on setting up a joint venture electric vehicle (EV) battery production plant in the US.
The announcement comes as South Korean President Yoon Suk Yeol is in the US for the first time in 12 years on a state visit to meet with President Joe Biden.
More than a hundred executives from South Korea's largest companies are traveling with Yoon on his US visit, which he has planned in terms of business opportunities. These leaders include Samsung Electronics Executive Chairman Jay Y. Lee and Hyundai Motor Group Executive Chair Euisun Chung.
GM and Samsung Partnership
According to Reuters, GM and Samsung SDI claimed that the construction of their proposed joint venture factory will begin in 2026. However, they did not specify where exactly the factory would be constructed. It is predicted thousands of new jobs will be created as a result.
The project would have an annual output capacity of 30 gigawatt hours (GWh). The manufacturing facility will produce high-nickel cylindrical and prismatic battery cells.
Earlier this week, a separate Reuters report indicated that the two corporations were gearing up to announce their plans for a combined EV battery facility in the US.
Investment in EV Development
GM, headquartered in Detroit, is trying to catch up to Tesla by pursuing electrification. Thus, it is aiming to widen its battery supply chain and ensure the capacity of components to support its electrification aspirations.
GM CEO Doug Parks remarked, "With multiple strong cell partners, we can scale our EV business faster than we could going alone."
To take advantage of incentives under the US Inflation Reduction Act, which is intended to stimulate local manufacturing, GM has already established a joint venture in the US with LG Energy Solution. GM has been spending to build up cell production with the South Korean battery company.
ABC News explained that in the US Inflation Reduction Act, EVs must be built in North America and have a specified proportion of their battery components and minerals from North America or a US free trade partner to qualify for the full tax credit.
Late last year, the US Department of Energy finalized a $2.5 billion loan to the GM-LG Energy joint venture. A $2.6 billion factory, one of three built by joint venture Ultium Cells LLC, will open in Michigan in 2024.
Last year, GM announced plans to produce 400,000 electric cars in North America from 2022 through mid-2024, with annual production rising to 1 million EVs by 2025. GM is reportedly debating whether or not it would need two new EV assembly lines to fulfill projected future demand.
