General Motors took another step towards vertically integrating its supply chain for electric vehicles, reveal a plan To work with POSCO Chemical to create a North American factory to manufacture materials for the battery cathode.
It’s a big move for GM, the car business, and even for US shares of GM (ticker: GM), received on the news, about a hair under $60 as of noon Wednesday at 3.7 percent. % extended.
The S&P 500 and Dow Jones Industrial Average were up 1.7% and 1.3%, respectively, as markets bounced back on Tuesday from selloff related to the Omicron version of Covid-19.
General Motors (ticker: GM) has big plans for EVs: It wants to sell electric vehicles only by 2035. GM plans to build a battery factory with LG Chem (051910. Korea), but the battery also needs materials.
That’s where the new plant fits in. Right now, most cathode materials—the cathode and anode are opposite sides of a battery that facilitate the flow of electricity—are manufactured in Asia. Bringing production to the US saves costs and gives GM more control over supplies and technology development.
Doug Parks, GM’s Executive Vice President of Global Product Development, Purchasing and Supply Chain, said: “Our work with POSCO Chemical is an important part of our strategy to rapidly increase US EV production and drive innovation in battery performance, quality and cost. Is.” GM news release. “We are building a sustainable and resilient North America-focused supply chain for EVs covering the entire ecosystem from raw materials to battery cell manufacturing and recycling.”
The cathodes that EV investors hear about these days include elements such as iron, cobalt, nickel, and lithium. Those are the ingredients that will be fed into the new facility. Supplying those elements is another step back along the EV supply chain.
The cathode material from the plant will flow to GM’s new battery factories, which will supply automotive assembly operations. Supply-chain work, as well as research and development by GM, is intended to reduce costs. That could help GM build a Chevy EV crossover. The size, between a sedan and an SUV, starts at around $30,000 by mid-decade, as management has said it plans to do.
The plant will be commissioned around 2024. GM expects this to create hundreds of jobs—positions that would have ended up overseas without local investment. The company has not disclosed any location for the factory.
Write to Al Root at [email protected]