General Motors (GM) plans to sell its stake in an electric vehicle (EV) battery cell plant to its joint venture partner LG Energy Solution for $1 billion.
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The Detroit automaker said it expects to recoup its initial investment in the $2.6 billion facility that is based in Michigan. The sale is part of a non-binding agreement between the two companies and is expected to close during the first quarter of 2025, said General Motors in a statement.
The battery cell plant is a 2.8 million-square-foot facility in Lansing, Michigan that is almost completed. It was expected to be the third battery cell plant between General Motors and LG Energy Solution in a joint venture the two companies have called “Ultium Cells LLC.” The other battery plants are located in Ohio and Tennessee, and they are already operational.
Pulling Back on Electric Vehicles
General Motor’s decision to sell its stake in the Michigan battery plant comes as the company pulls back on its electric vehicle ambitions amid slower-than-expected consumer demand. It also comes amid uncertainty regarding federal incentives for purchasing electric vehicles under president-elect Donald Trump.
General Motors said the sale of the Michigan battery plant doesn’t impact its overall ownership stake in the joint venture it has with LG Energy Solution. GM said the South Korean battery supplier will have immediate access to the Michigan battery facility, which is expected to begin operations by the end of this year. The stock of GM has risen 55% this year.
Is GM Stock a Buy?
The stock of General Motors has a consensus Moderate Buy rating among 18 Wall Street analysts. That rating is based on 10 Buy, six Hold, and two Sell recommendations issued in the last three months. The average GM price target of $56. 47 implies 2.60% upside from current levels.
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