GM, LG Energy Drop Plan For Fourth U.S JV Battery Plant

General Motors Co and LG Energy Solution do not plan to move forward with a fourth U.S. battery cell manufacturing plant, two sources told Reuters on Friday.

The companies' joint venture Ultium Cells LLC said in August it was considering a site in New Carlisle, Indiana, for a fourth U.S. battery plant, expected to cost around $2.5 billion.

"We’ve been very clear that our plan includes investing in a fourth U.S. cell plant, but we’re not going to comment on speculation," GM said in a statement on Friday.

LG Energy said late on Friday that discussions on a fourth plant remain ongoing "but no decision has been made." The plan was reported earlier by the Wall Street Journal.

GM could still proceed with plans to build a new plant in Indiana with a new partner, the sources said.

The Detroit automaker and the South Korean company are building a $2.6 billion plant in Michigan, set to open in 2024. In December, Ultium said it would boost its investment in a $2.3 billion Tennessee plant that is set to open later this year by another $275 million.

GM said Friday it is rapidly investing to ramp up cell production with LG Energy, adding that the plants in Tennessee and Michigan are on track to open in 2023 and 2024, respectively.

"This cell capacity keeps us on track to produce 400,000 EVs (electric vehicles) in North America by mid-2024 and we expect to have cell capacity to produce more than 1 million EVs annually in North America in 2025," GM said.

Last month, the U.S. Energy Department finalized a $2.5 billion low-cost loan to Ultium to help pay for the three factories.

President Joe Biden has set a goal for 50% of U.S. auto production by 2030 to be electric or plug-in electric hybrid vehicles. GM plans to stop selling gasoline-powered vehicles by 2035 but is still investing in internal combustion production.