General motors (gm) announced on monday that it is selling its stake in the ultium cells llc battery factory in delta township, michigan, to its joint venture partner, south korea-based lg energy solution. This factory, which was initially touted as a key part of michigan’s role in the electric vehicle (ev) industry, is still under construction and expected to be completed by 2025.
The factory, which has cost up to $2.5 billion to build, was announced in 2022 with great fanfare. It was part of a major economic development deal, including a $186 million subsidy from the state, aimed at boosting michigan’s ev industry and creating jobs.
However, delays in the ev sector and questions about the effectiveness of these subsidies have raised concerns. Gm’s decision to sell its share in the facility comes at a time when michigan lawmakers are questioning the value of such large-scale incentives.
The battery plant, located near gm’s delta township assembly factory, is slated to employ up to 1,700 workers, though hiring is currently ramping up under lg energy solution. As of now, nearly 100 people are employed at the plant, with further hiring expected to meet the state’s employment goals.
Despite the plant’s substantial investment, gm executives, including cfo paul jacobson, stated that the automaker no longer needs the additional capacity from this factory. Gm has emphasized that its existing battery manufacturing facilities in ohio and tennessee, along with the lansing plant, will be scaled based on customer demand.
The sale of gm’s stake in the factory is expected to close in early 2025, and while gm did not disclose the financial details of the transaction, it expects to recoup its $1 billion investment. This move comes as gm also seeks additional tax incentives for a redevelopment project in detroit, which has faced criticism from some state lawmakers, further fueling concerns about gm’s commitment to michigan.