General Motors has announced that it is selling its stake in the nearly completed Ultium Cells battery cell plant in Lansing, Michigan to its joint venture partner LG Energy Solution. This move comes amid weakening electric vehicle demand and the potential rollback of Biden administration incentives to produce clean energy domestically.

The joint venture between GM and LGES was formed in 2019 to mass produce battery cells for electric vehicles. Since then, the two companies have invested billions in three factories: the Lansing facility, a Spring Hill, Tennessee facility that started production in 2024, and a Lordstown, Ohio factory that has been producing battery cells since 2022. The cells produced at these plants power a range of vehicles, including the Chevrolet Silverado EV, GMC Sierra EV, Cadillac LYRIQ, Chevrolet Blazer EV, and Chevrolet Equinox EV, as well as the GMC HUMMER EV pickup and SUV.

In recent months, GM has been shifting its focus towards new types of cells and chemistries, such as lithium iron phosphate (LFP) batteries. In October, the company dropped the Ultium battery brand name as part of this move. This shift in strategy may be a contributing factor to GM's decision to sell its stake in the Lansing plant.

The news of GM's nonbinding agreement with LGES comes a few months after reports that the two companies were slowing the buildout of the Lansing plant, which was expected to start production in 2025. LGES did not respond to confirm if that timeline is still accurate, nor whether the company still expects the plant's capacity to reach 45 GWh at peak production.

Neither company shared the acquisition price, but a spokesperson from GM said the company expects to recoup its initial investment. GM and LGES initially announced a $2.6 billion investment into the plant, but it's not clear how much each company has spent. The sale of GM's stake in the plant is seen as a strategic move to adapt to changing market conditions and focus on other areas of its electric vehicle business.

GM also announced that it would work with LGES to jointly develop prismatic battery cells. These cells, while heavier and more expensive than the pouch cells currently produced at the Ohio and Tennessee plants, have a higher energy density, longer life cycle, and better heat management. It's unclear whether these cells will be produced at one of the remaining joint venture sites or in a yet-to-be-announced facility.

The sale of GM's stake in the Lansing plant is a significant development in the electric vehicle industry, particularly given the current market conditions. Weakening demand for electric vehicles, combined with the potential rollback of Biden administration incentives, has created uncertainty for automakers and battery manufacturers. GM's move to sell its stake in the plant may be seen as a way to mitigate these risks and focus on other areas of its business.

The news also highlights the ongoing shift in the electric vehicle industry towards more sustainable and efficient battery technologies. As the industry continues to evolve, companies like GM and LGES will need to adapt to changing market conditions and invest in new technologies to remain competitive. The joint development of prismatic battery cells is a key step in this direction, and may pave the way for further innovation in the industry.

In conclusion, GM's sale of its stake in the Ultium Cells battery plant in Michigan is a significant development in the electric vehicle industry. The move comes amid weakening demand for electric vehicles and the potential rollback of Biden administration incentives, and highlights the ongoing shift towards more sustainable and efficient battery technologies. As the industry continues to evolve, companies like GM and LGES will need to adapt to changing market conditions and invest in new technologies to remain competitive.