General Motors (GM) agreed to sell its stake in the $2.6 billion electric vehicle battery cell plant in Lansing, Michigan, to its joint venture partner, LG Energy Solution. GM will receive approximately $1 billion from the deal, with completion expected in the first quarter of 2025.

The almost completed 2.8 million-square-foot plant in Lansing was to be the third facility for the joint venture Ultium Cells LLC, after operating plants in Ohio and Tennessee. Lansing facility, announced in January 2022, was part of GM’s plan to scale up EV production as demand for battery cells is increasing. As consumer demand for EVs declines, and there is uncertainty surrounding federal incentives for EV manufacturing and purchases, GM has adjusted its strategy.

While selling its stake in the Lansing plant, GM mentioned that it does not affect its overall equity stake in the Ultium Cells joint venture and does not change any future plans that it might have for an independent partnership with LGES’s competitor, Samsung SDI. GM Chief Financial Officer Paul Jacobson said both companies would be able to become more efficient and produce enough capacity for the increasing need for battery capacity.

Additionally, GM has expanded the 14-year battery technology deal with LGES to the development of prismatic cells. These are flat and rectangular in shape, offering several benefits: better space efficiency and cost savings from a streamlined manufacturing process. GM expects these to reduce the weight and cost of EVs, while improving their performance and safety.

Lansing, the plant should start up in a matter of weeks with about 100 employees working there and will have the company, LGES install their equipment. In this, a move by GM to reposition itself better within its industry for the future, that of a highly competitive EV market.