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Observation on the GM/LG Chem Battery JV
When an OEM and a supplier collaborate for battery production
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Cadillac EV concept (Image: GM)
An interesting observation from Christopher Robinson, senior research analyst at Lux Research regarding the announcement made last week by GM and LG Chem that the two companies are creating a 50:50 joint venture company to assembly battery cells for electric vehicles at a new site in the Lordstown, Ohio, vicinity:
“The location and size of the announcement are unsurprising: 30 GWh is roughly the size of other large battery manufacturing facilities, and siting it near vehicle assembly reduces transportation costs. What is significant about the announcement is that GM is forming a joint venture with a supplier and owning a share of battery production. Competitors Nissan divested in their cell manufacturing ownership, and most other OEMs will make their own pack but purchase cells from suppliers, while VW is pursuing cell manufacturing through a low-risk engagement with startup Northvolt. Automakers may want more control over their supply chain and differentiation, and it won't be surprising if more OEMs take larger ownership of cell production.”
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