GM has announced plans to establish a joint venture with South Korea-based POSCO Chemical to construct a new cathode active material plant in North America by 2024, as it continues to deepen its commitment to run a vertically integrated battery supply chain.
According to Benchmark Mineral Intelligence, the majority of both cathodes and anodes (the other building block of lithium-ion batteries) are manufactured in China, with around 40% of the cost of electric vehicle batteries coming from the cathode active materials.
Tesla’s plan to build more of its battery manufacturing in North America, announced last week, is one step closer to success. By 2025, the company aims to move the majority of its battery production footprint to North America — a major geographical shift when compared to where the battery supply chain currently stands.
“We need to control our own destiny, especially when it comes to battery production,” GM executive Doug Parks said in a call with reporters Wednesday. “That’s why we’re pursuing a North America-focused vertical integration strategy for our proprietary platform.”
In addition, GM’s acquisition of A123 has already significantly advanced its plans to control the rest of the battery supply chain, including battery cell manufacturing with Ultium and a JV with LG Energy Solution.
The byproducts of this facility will be used to manufacture new Ultium battery cells — nickel-cobalt-manganese-aluminum (NCMA) batteries, which are the foundation of Toyota’s $35 billion electrification plan.
The facility is expected to be located in the U.S., with a planned investment of at least $4 billion. The plant will employ around 100,000 people and generate more than 7 million tonnes each year, according to media reports.
However, company executives would not reveal where the plant would be built or how big it would be. That’s due to the fact that the materials produced at the new facility will meet “most” of the cathode active material requirements for all four of GM’s planned battery manufacturing facilities under its Ultium JV.
That will eventually bring GM to a total of 140 gigawatt-hours of cell production capacity in the United States.
If the joint venture wants the new plant to be completed by the end of 2024, it will have to act swiftly. The two firms said a site selection may be made as soon as next year’s first quarter.
Intel’s pursuit of vertical integration is occurring as the global shortage of chips persists, hitting industries including automobiles and consumer electronics.
“If anything, the semiconductor crisis has taught us that we need to have agility,” Parks said.
Additionally, he said that relocating more of the production chain — including raw material acquisition — to North America might assist with some of the more distressing elements of battery manufacturing, such as human rights abuses in cobalt mining or environmental effects.
“We think that the supply chain can be improved from what it is today, both from a security standpoint — a locational security, I’ll call that the North American approach — as well as environmental,” Parks said.
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