GM partners with LG to build new battery production plant, create 1,100 jobs

"GM believes in an all-electric future," Barra said Thursday.
Image: Mary Barra
General Motors CEO Mary Barra speaks to the news media before the automobiile maker's annual meeting of shareholders at GM world headquarters June 12, 2018 in Detroit, Michigan.Bill Pugliano / Getty Images

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By Paul A. Eisenstein

GM announced Thursday it has partnered with South Korea's LG to build a battery-cell production plant in Ohio, creating 1,100 jobs.

Similar in concept to Tesla’s Gigafactory in Nevada, the new facility will help provide the batteries needed to power a wave of all-electric vehicles General Motors is preparing to roll out over the next three years. And it will be a “critical” part of the process of both extending the range of those vehicles while driving down their cost, said GM CEO Mary Barra.

“Combining our manufacturing expertise with LG Chem’s leading battery-cell technology will help accelerate our pursuit of an all-electric future,” said Barra, noting that the automaker is “on target” for meeting a goal of having 20 all-electric vehicles in production by 2023.

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Currently, GM produces just one long-range battery-electric vehicle, or BEV, the Chevrolet Bolt EV. But Barra said the automaker is “on track” to boost that to 20 by 2023. The next model to reach market will be an all-electric SUV to be sold by the Cadillac division. And the ramp-up will quickly accelerate after that launch, Rick Spina, head of GM’s EV operations, told NBC News in an interview last week.

LG Chem already provides batteries to GM for a number of vehicles, including the Bolt, through an operation in Michigan. The new facility, which is expected to create about 1,100 new jobs, will be based in Lordstown, OH, not far from the assembly plant the automaker closed last year — in the process taking numerous hits, among other things from President Donald Trump.

GM has offered jobs at various other plants to all the workers displaced by that closing, Barra noted. As a separate company, however, the new battery plant will not immediately offer spots to displaced GM workers. They will have to apply like anyone else. Barra also indicated the new facility won’t immediately unionize, stressing that will be up to its future workforce.

The size of the investment in the new joint venture suggests that the new plant will serve a similar role to the Reno, Nevada-based Gigafactory run by Tesla, now the country’s largest producer of BEVs. GM has said its own goal is to become the “leader” in battery-car production.

So far, demand for electrified vehicles of all forms — from hybrids to BEVs — accounts for barely 5% of the U.S. market. All-electric models alone generate barely 2 percent of new vehicle demand. Experts believe that increasing range, driving down cost and expanding the availability of public charging stations will be needed to increase the appeal of BEVs.

The new joint venture should help address the range and cost challenges, said Barra. Batteries are, for one thing, getting more energy dense and should help GM meet the 300-mile range target most consumers seem to expect.

As for pricing, when GM launched the Chevrolet Volt, the world’s first mass-market plug-in hybrid. The battery used in that vehicle ran around $1,000 a kilowatt-hour. According to GM President Mark Reuss, the batteries for the all-electric Bolt cost around $145. In a vehicle with about 60 kWh of cells, that is a substantial savings and moves things closer to the point where BEV prices will be on par with comparable models using an internal combustion engine.

GM has set an internal target of dropping battery costs to below $100 per kilowatt-hour. Barra declined to directly say whether the new Lordstown plant will get it there, but suggested that is one of the key goals for the project.