Semiconductor shortages—and 90,000 unfinished vehicles awaiting chips—put a serious crimp in General Motors profits in the second quarter of 2022. The automaker doesn’t expect those shortages, which are affecting every automaker to different degrees, to be resolved anytime soon. Meanwhile, as that supply-chain drama plays out, GM, like Ford last week, is crossing the t’s and dotting the i’s on its electric-vehicle strategy.
In their July 26 second-quarter earnings call with analysts, GM CEO Mary Barra and CFO Paul Jacobson shared the details of three new raw materials partnerships; emphasized the need to lower battery production costs; and updated progress on four U.S. battery-cell plants (shared by GM and LG) in various stages of development.
The launch of the Ultium Cells JV battery-cell plant near Youngstown, Ohio is “weeks away,” said GM CEO Mary Barra. Production will ramp up 20% each quarter, so that the plant is expected to be at full production in the fourth quarter of 2023.
“We need the cells coming from the Ohio joint venture plant to really ramp the existing products we have, both the [Cadillac] Lyriq and the [GMC] Hummer,” said Barra.
Construction on a second battery-cell plant in Tennessee is on track and it is scheduled to open next year, Barra said. Foundation work is underway and steel work starts in August on a third plant in Lansing, Michigan, scheduled to open in 2024. Site selection is happening now for the fourth U.S. plant.
Having all four plants up and running at capacity will give GM the 160 gigawatts of battery capacity needed to reach its production goal of 1 million EVs by 2025, said Barra.
A $2.5 billion conditional loan from the U.S. Department of Energy, announced yesterday, is key to financing construction of the Ohio, Tennessee and Michigan Ultium plants, said Jacobson.
GM also announced three strategic supplier agreements for battery raw materials: LG Chem to supply GM 1 million tons of cathode material by 2030; POSCO Chemical to supply processed battery materials (CAM) from their Korean operations through 2025; and Livent to supply “significant quantities of lithium.”
“What this means is GM now has binding agreements securing all battery raw materials supporting our goal of 1 million units in annual capacity in North America in 2025,” said Barra. “This includes lithium, nickel, cobalt and the full CAM supply.”
Plans also call for expanding raw material processing at a GM/POSCO plant in Quebec, and possibly building a similar GM/LG facility in the U.S. by 2025.
“For certain commodities, we will direct source 75% of our needs through 2030 with a focus on North America,” said Barra.
Battery engineering is another priority, said Barra. “We’re working not only internally but with LG and several other EV people involved in different parts of battery chemistry to take cost out. That’s why we have the Wallace R&D Center for Manufacturing starting up this fall.
“As we look at a lot of promising battery technologies, where people struggle is to scale at automotive grade and have the manufacturing consistency,” she said.