General Motors CEO Mary Barra visited South Korea to meet the automaker’s Korean battery manufacturers -- LG Energy Solution and Samsung SDI -- to strengthen their partnerships further and discuss the global electric vehicle transition amid slowing EV growth.
According to industry sources, the GM chair on Wednesday met with LG Energy Solution CEO Kim Dong-myung and Samsung SDI CEO Choi Yoon-ho in Seoul. Barra was spotted at Gimpo International Airport on Tuesday evening. The visit marked her first visit to Korea since she became the head of GM in 2016.
Although no companies disclosed what was on the table during the meetings, the heads of the US automaker and Korean battery manufacturers are expected to have discussed topics including battery supply, operation and construction of their joint factories, unit prices and their long-term partnerships.
Ultium Cells, a joint venture between LG Energy Solution and GM in the US, is operating a battery manufacturing plant in Ohio with an annual capacity of 35 gigawatt hours. The joint venture’s two other plants -- in Tennessee with 35 GWh and Michigan with 50 GWh -- are expected to begin operations in the first and the fourth quarter of this year, respectively.
Sources said the GM chair is likely to have asked LG Energy Solution to upgrade the automaker’s portion of the tax benefits that they receive from the US government with the advanced manufacturing production credit, known as AMPC, under the Biden administration’s Inflation Reduction Act.
In November, GM reportedly demanded LG Energy Solution to share up to 85 percent of the government incentives in exchange for pledging their joint venture’s profit margin beyond specific levels. As Ultium Cells was a 50 to 50 joint venture between the two firms, the current AMPC share rate between them is estimated to be around half and half.
According to LG Energy Solution’s fourth-quarter earnings result, the battery maker received tax credits worth about 676.8 billion won ($510.5 million) for its US production last year. The company logged record-high figures with both an annual revenue of 33.75 trillion won and an operating profit of 2.16 trillion won.
With GM's chief in town, LG Chem announced a 24.7 trillion won cathode supply deal with the US automaker. According to the announcement, LG Chem will supply over 500,000 tons of cathode materials from 2026 to 2035, enough to power 5 million EVs.
In December last year, LG Chem broke ground in Tennessee for the construction of what will be the largest single cathode plant in the US upon completion, with an annual production capacity of 60,000 tons. The company expects to begin the operation of the plant in 2026. Nickel, cobalt, manganese and aluminum (NCMA) cathode materials produced there will be delivered to Ultium Cells.
As for the talks with Samsung SDI, the GM chief is assumed to have ironed out the details concerning their plans to build a joint battery plant in the US. In April last year, Samsung SDI and GM unveiled a plan to build a joint battery manufacturing plant capable of producing 30 GWh per year in Indiana with the target to begin operations in 2026.
According to reports, Barra also met with high-level executives of Samsung Display, Samsung Electronics and Samsung Electro-Mechanics to discuss in-vehicle electronics and semiconductors and explore various ways for cooperation.
GM announced last week that it will bring back plug-in hybrid technology to certain vehicles in the US market, a move seen as an attempt to cope with the lagging demand for EVs. The automaker, however, reaffirmed its commitment to EVs and to removing internal combustion engine vehicles in its light-duty segment by 2035.
GM Korea on Friday announced its plans to release four new vehicles in the local market, including two EVs.
