General Motors is expanding its partnership with South Korea’s Posco Chemical, building a $400 million plant in Quebec to produce components its Ultium EV batteries.
The companies already work together supporting the Lordstown, Ohio Ultium plant. That deal was announced in early December and Posco is the majority stakeholder.
That venture produces the cathode active materials, or CAMs, for EV batteries. CAMs account for about 40% of the cost of a battery cell. The new venture, which is expected to be up and running by 2024, will supply GM four new Ultium battery plants in North America.
The Quebec-based entity will produce CAMs for the Chevrolet Silverado EV, GMC Hummer EV and Cadillac Lyriq, GM noted in a statement.
Adding power to build power
Construction on the new facility, which the joint venture will operate, is slated to start immediately. GM says it will create approximately 200 jobs, although the plant will be designed to allow for future expansion opportunities as GM continues to pursue many potential future EV supply chain projects.
It will supply components to other facilities, including the new Lansing, Michigan battery plant recently announced by the company, as part of a $7 billion EV-based investment effort in Michigan.
“GM and our supplier partners are creating a new, more secure and more sustainable ecosystem for EVs, built on a foundation of North American resources, technology and manufacturing expertise,” said Doug Parks, GM executive vice president, Global Product Development, Purchasing and Supply Chain.
“Canada is playing an important role in our all-electric future, and we are grateful for the strong support we have received from local, provincial and national officials to grow a North American-focused EV value chain.”
Critical to cutting costs
GM’s push to have more than 30 EVs on the road by 2030 requires an effort to cut the cost of batteries. Part of that comes from economies of scale. The company plans to have four U.S.-based Ultium plants capable of producing batteries for 1 million vehicles annually by the end of 2025.
GM’s identified the location of three of the plants: Lordstown, Ohio; Spring Hill, Tennessee; and Lansing. The fourth site hasn’t yet been identified. As mentioned, the new plant in Bécancour, Quebec will supply CAM to multiple sites.
- It’s also part of GM’s plans to organize its supplier base to ensure it has the materials it needs when needed — hoping to avoid a replay of the ongoing semiconductor shortage. Those additions include:
- Lithium with Controlled Thermal Resources (CTR) to secure lithium produced by the first stage of its Hell’s Kitchen Project in California.
- Rare earth materials with GE, to develop a rare earth value chain.
- Alloy flakes with MP Materials, who will establish the first North American processing site for alloy flakes. The company will then expand into magnet manufacturing around 2025 at its new production facility in Fort Worth, Texas.
Permanent magnets with VAC, the largest producer of permanent magnets in the Western Hemisphere with nearly 100 years of experience. VAC will establish a North America footprint to support GM’s magnet requirements starting in 2024, including locally sourced raw materials and finished magnet production.
Competitors like Ford, Stellantis and others have all made announcements recently about forming partnerships to ensure its battery supplies don’t get interrupted.