According to BloombergFebruary 19th report, sources reveal,Following General Motors' withdrawal from the Michigan battery plant project, Toyota has agreed to take over withLG New Energy secures a $1.5 billion order for the factory.
GM Sells Off Factory Equity
Last yearIn December, General Motors announced its plan to sell its $1 billion stake in the Ultium Cells Lansing battery plant in Michigan to LG Energy Solution. This move has prompted LG Energy Solution to consider the acquisition and necessitates the search for new customers.
In the Bloomberg report, Toyota confirms,LG New Energy is expected to complete the expansion this spring..Toyota agrees to acquire Lansing plant, at which time...An existing order from LG Energy Solution has been transferred from another Michigan facility to the Lansing plant. Sources reveal the order is valued at $1.5 billion.
For this,LG Energy Solution declines to comment and states that a press release will be issued following the completion of the factory acquisition. In a statement, the company said, "This is part of our strategic objective to further optimize our investments in North America and to meet the demands of global automakers."
In fact, as early as last year,In July, news of the suspension of construction at the Lansing factory emerged. LG Energy Solution cited the reason for the halt as "the partner's electric vehicle business development falling short of expectations." According to the previous plans of General Motors and LG Energy Solution, the factory was to be operated by their joint venture, Ultium Cells, with an original completion date set for the end of 2024 and mass production scheduled to begin in early 2025, with an annual production capacity of 50 GWh.
Due to the low demand, General Motors has already begun to reduce its investment in electric vehicles. Selling a stake in the Lansing factory will help alleviate cost and financial pressures.
Please provide the Chinese content to be translated.LG Energy Solution's acquisition of the soon-to-be-completed battery factory will, on one hand, shorten the project timeline, helping to optimize the company's operations and enhance production efficiency in North America.
On the other hand,LG Energy Solutions is also set to receive substantial funding. General Motors and LG Energy Solutions have secured $186 million in incentives for the Lansing plant. An insider revealed that GM has been collaborating with the state of Michigan and the Michigan Economic Development Corporation to transfer these rewards to LG Energy Solutions, with the expectation that this process will be completed within the next few months.
In addition to introducing orders already signed with Toyota, for the customer channels of the Lansing factory,LG New Energy also plans to sell a portion of its factory products to fixed storage customers, driven by the burgeoning demand from data centers and the growth of artificial intelligence.
Additionally, it is worth noting that,The Lansing plant is a General Motors facility.One of LG Energy Solution's joint venture factories, with the other two located in Ohio and Tennessee, the total planned investment for the three factories reaches $7.475 billion.Among them, the Ohio factory has already2022 Year.The facility is now in full production, boasting an annual production capacity of30GWh, with the potential to expand to 40GWh annually; the Tennessee facility is planned to have an annual production capacity of 50GWh, and began production in April 2024, delivering the first units to customers..A batch of batteries, expected to be installed in General Motors' vehicles.On the third-generation electric vehicle models, such as "Cadillac Lyriq."
Toyota is a key client.
Toyota Motor CompanyLG Energy Solution, one of its key clients, has announced that it has signed an EV battery supply agreement with Toyota North America in October 2023.
Pursuant to the agreement,Please provide the Chinese content to be translated.Starting in 2025, LG Energy Solution will supply Toyota with 20GWh of automotive battery modules annually.The module is made with high-nickelThe NCMA (Nickel, Cobalt, Manganese, Aluminum) pouch-style battery assembly will be produced at LG Energy Solution's Michigan facility for the new electric models being manufactured at Toyota's Kentucky plant.
At that time, neither party disclosed the duration or amount of the cooperation. However, based on the above Bloomberg report, Toyota Motor andLG Energy Solution has secured orders exceeding $1.5 billion.
To implement the collaboration with Toyota,LG Energy Solution was equally committed at the time. The company planned to invest a total of 4 trillion KRW in its Michigan facility from the end of 2024 to 2025, exclusively for Toyota to establish a battery and module production line. Now, Toyota is transferring an order to the Lansing plant, and it remains to be seen how this dedicated line will proceed.
Additionally, the same yearIn October, Toyota North America also signed a long-term supply contract for cathode materials for secondary batteries with LG Chem, the parent company of LG Energy Solution. The contract is expected to reach 2.86 trillion KRW by 2030. Industry analysis suggests that the supply scale can produce between 600,000 to 700,000 electric vehicles.
Three: Cost reduction is becoming an industry trend.
Bloomberg reports that South Korean companies are investing in the U.S.The company is investing $54 billion to build an electric vehicle battery factory, aiming to capitalize on the electric vehicle boom under former President Biden's Inflation Reduction Act subsidies. However, as automakers scale back their electric vehicle plans, the White House threatens to scrap support for electric vehicles, and LG Energy Solution is cutting spending.
In January this year, LG Energy Solution announced that its capital expenditures for the year will be reduced by 20%-30% compared to last year, in response to the uncertain outlook of the global electric vehicle industry.
As geopolitical and economic situations become increasingly complex, cutting costs is becoming a trend in the renewable energy industry.
KORE Power and FREYR Battery have both announced the cancellation of their plans to build lithium-ion battery factories in Buckeye, Arizona, and Coweta, Georgia, respectively. The two plants were originally set to invest $1 billion and $2.6 billion each.
Downstream vehicle manufacturers have also taken action. For instance, the opening of General Motors' electric truck factory in Orion, Michigan has been postponed to next year; recent reports from foreign media have indicated that cost control measures are being implemented.Stellantis plans to launch a trimmed-down Citroën ë-C3 with a range of 200 kilometers, featuring BYD's iron-phosphate lithium batteries. Meanwhile, Volvo's new EX90, produced in the U.S., is seeking a substitute from CATL.
