GM And LG Could Shelve Plans For A Fourth US Battery Plant

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Is the EV craze beginning to wane already?

General Motors and LG Energy Solution will reportedly not move forward with a fourth US-based battery plant. This comes as quite a surprise as GM and LG finalized a deal for three plants in December and were already in talks to build a fourth plant in Indiana, specifically in New Carlisle.

The Department of Energy finalized a low-cost loan of $2.5 billion to the two manufacturers as part of the Inflation Reduction Act's mission to cut the USA's reliance on batteries sourced from China.

Reuters spoke to two sources familiar with the matter, who confirmed the news. The sources also revealed that GM might still proceed to build the Indiana plant but with a new partner.

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GM released a statement saying that it has been clear about investing in a fourth US plant and would not comment on speculation. LG Energy Solution also sent out a statement claiming that discussions were ongoing but that no decision had been made.

GM and LG still have three American battery plants to launch, and these are reportedly taking longer to get off the ground than anticipated. With the threat of a looming recession, another big project right now may not be prudent.

Earlier this month, GM announced plans to invest $918 million in four US manufacturing facilities. The vast majority of the investment is for the development and production of a new sixth-generation small-block V8, which indicates that GM is not confident EVs will be as popular as expected.

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Could we possibly be seeing the first signs of an EV bubble bursting? Experts are already predicting that EV demand will fall short of supply. Customers remain hesitant to switch from ICE to EV, and it's easy to see why. Manufacturers can't even agree on which battery chemistry is best, not to mention most EVs becoming obsolete as soon as solid-state batteries become viable. These batteries are smaller, more energy dense, and less resistant to fire, so every car equipped with nickel-cobalt and lithium-ion batteries will be dinosaurs by comparison.

The EV industry is also volatile enough to be upset by Tesla's sudden price drop. In the space of one week, Elon Musk made several other CEOs cry themselves to sleep at night.

Not to mention all the billions we're talking about are being spent on a segment that only represents 5.8% of all car sales in the USA.


It's no secret that GM makes most of its profits from trucks and SUVs, which is why it's investing nearly a billion to develop a new unit. No specifications are available, but GM hinted that it would be used in trucks and SUVs.

We can't see Chevrolet launching the Silverado EV and letting the rest of the Silverado and Silverado HD range go. The same goes for popular SUVs like the Tahoe and Yukon. This suggests that GM will follow the same route as BMW and Hyundai, investing in multiple energy sources. BMW even stated that it won't let politics dictate its business model, which makes sense considering that three US presidential elections will occur between now and 2035.

It will be interesting to see how this all plays out since three states (so far) have confirmed that they will ban ICE sales come 2035.

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Source Credits: Reuters

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