GM JV with Posco Chemical to open N. American cathode plant in 2024

DETROIT — General Motors is forming a joint venture to process cathode active material in North America, localizing a key piece of the battery supply chain that's now primarily in Asia.

GM expects to finalize the joint venture with Posco Chemical, a South Korean advanced materials company, by the first quarter. GM also plans to announce the location of the cathode plant, which would open in 2024, by March, the automaker said last week.

The companies did not disclose their financial commitment, but Doug Parks, GM's executive vice president for global product development, purchasing and supply chain, told reporters last week that the partnership "will be a significant investment by both companies, both in dollars and strategically."

Parks called the cathode "the energy source" of lithium ion batteries. It affects a battery's performance, safety and price and represents about 40 percent of the cost of a cell, he said.

Today, most cathode processing is done in China, leading to a significant carbon footprint for battery cells that are later built in North America. The distance between China processing centers and future U.S. battery cell plants also could lead to supply chain disruptions similar to those the industry has faced during the global microchip shortage. The joint venture is part of GM's strategy to reset and localize the battery supply chain as it scales EV production.

GM plans to invest $35 billion in electric and autonomous vehicle development and launch 30 EVs globally through 2025, leading to an all-electric light-vehicle lineup a decade later.

In late 2019, GM and LG Energy Solution — previously called LG Chem — formed a joint venture to develop proprietary Ultium battery cells in the U.S.

The GM-Posco cathode processing center will supply Ultium Cells plants that GM and LG Energy Solution are building in Lordstown, Ohio, and Spring Hill, Tenn. GM plans to open two additional Ultium plants in the U.S. by mid-decade but has not specified locations.

GM's joint venture with Posco follows a series of partnerships formed this year to source key materials for battery cells, improve supplies of rare-earth materials and magnets for electric motors, develop silicon carbide solutions for power electronics within GM's Ultium Drive units, and recycle material scrap from battery cell manufacturing.

In the past, GM has purchased batteries from suppliers. Through partnerships and joint ventures, GM is becoming a battery research, development, design and manufacturing organization, Parks said.

"We're vertically integrating a lot of these pieces, both from an engineering and a supply chain standpoint," Parks said. "It's truly the future of the foundation of Ultium and our electric vehicle future."