Ultium Cells, a US joint venture between LG Energy Solution (LGES) and General Motors (GM), has suspended construction of its third plant in Michigan, according to reports citing a company official.
Ultium Cells already has two factories operating in Michigan and construction of a third plant with a planned annual production capacity of 50 gigawatt hours (GWh) of batteries began in 2022. The US$2.6bn factory was scheduled to be completed in later 2024 with initial production planned for early 2025.
The joint venture had already taken delivery of manufacturing equipment for two of the five manufacturing lines. When fully operational the plant would be able to produce enough battery cells per year to power 700,000 high performance EVs with a range of 500km (300 miles).
The JV partners this week agreed to delay competition until the end of 2025, or even later, due to weaker than expected battery electric vehicle (BEV) demand in the US and political uncertainty ahead of the US presidential elections.
Former US president Donald Trump has indicated that, if re-elected, he would revise the Inflation Reduction Act (IRA) and walk back some of the current administration's pro-EV policies.
GM, the plant’s main customer, has scaled back its BEV plans in the short term with CEO Mary Barra saying earlier this month the automaker would not be able to build 1m BEVs annually by the end of next year as previously planned.
In June LGES announced it was delaying construction of a wholly owned energy storage system (ESS) production facility in Arizona but said the adjacent battery plant would be built as scheduled.
An LGES spokesperson said the company was “adjusting” the speed of its overall investment and is looking at ways to make its operations more flexible but had not cancelled BEV battery investment plans.
Other South Korean battery makers, including Samsung SDI and SK On, also have ambitious expansion plans in North America with a number of battery plants under construction and planned. They are also monitoring developments closely.
