GM and LG are joining forces to create batteries for new electric vehicles. LG is a Korean manufacturer of many things, batteries being one of the items. As more and more electric vehicles require specific battery types, demand is increasing exponentially.

GM and LG make Ultium Cells LLC

CNBC reported that the brands are building a $2.3 billion battery cell plant in Tennessee. Ultium Cells LLC will be a joint venture to support vehicle batteries for new EVs like the Cadillac Lyric crossover.

Additionally, being able to build batteries in a more local sense will help reduce the cost. Production of batteries is a crucial component as more brands make the switch to all-electric.

While COVID-19 has impacted many facets of the automotive industry, battery production was not immune to that. To keep up with increasing demand, a new battery factory is imperative.

Another added benefit is that the facilities will create more jobs for locals. These will likely increase as demand for electric vehicle batteries increases over the next decade.

U.S. based supply chain for electric vehicles

The 2023 Cadillac Lyriq is assembled in Spring Hill, fairly close to where the new battery production plant is planned. The company plans to start on construction immediately to be in full swing by the end of 2023, hopefully.

The Lyriq is one of the first electric vehicles as the lineup changes to focus on electric over gas-power. After that, the Hummer EV is well on its way to production.

In addition to creating batteries, the plant will create around 1,300 new jobs. But what this really means is that the U.S. will create its own supply chain to keep up with demands. Currently, most of the batteries used in U.S. electric vehicles are made in Asia and Europe.

As many manufactures have vowed to move to all-electric vehicles in the future, demands for parts like the battery will only increase more.

This Tennessee facility will enable manufacturers “to build solid and stable U.S.-based supply chains that enable everything from research, product development, and production to the procurement of raw components,” LG president and CEO Jong Hyun Kim said.

This is the second plant for the automaker

In addition to this plant in Tennessee, GM is also building a plant in Lordstown, Ohio. While that might seem like overkill, it actually highlights just how much the plants are needed.

As production for the new GMC Hummer electric vehicle is slated to begin soon, the first round will not include Ultium batteries. Since the Hummer will start getting delivered soon, the batteries for the first round will not be ready yet. LG will supply these batteries from another LG factory while construction is underway.

However, there are many vehicles down the line that will benefit from this new venture. It isn’t clear when both facilities will open, but construction is already well underway in Ohio.