G.M. Venture to Create Ohio Battery Plant and 1,100 Jobs


After idling its car plant in Lordstown, Ohio, this year, General Motors promised that it would bring jobs back to the once-mighty manufacturing region.

On Thursday, its plans began to take a shape: It will build a factory to make electric-vehicle batteries along with a South Korean partner, LG Chem.

The companies said they planned to invest a total of $2.3 billion in a joint venture that would produce battery cells. G.M. and LG Chem would have equal stakes in the business.

Executives said the venture would set up a plant in the Lordstown area that would create more than 1,100 jobs. Groundbreaking is expected in the middle of next year.

“We think as we do this in a joint fashion it is going to accelerate our ability to win in the electric vehicle space,” G.M.’s chief executive, Mary T. Barra, said at a news conference. “I absolutely believe this is a critical point, with LG Chem and G.M. working together to drive affordability.”

The cost of battery packs is one of the major challenges of luring mainstream consumers to electric vehicles. Tesla, the leading seller of electric cars, makes its own battery packs in a joint venture with Panasonic at a giant factory in Nevada. Even with the economies of scale of that plant, however, most Tesla cars still sell for $10,000 or more above the average new-car price of about $35,000. And Tesla has yet to show it can make money consistently.

“It’s not at all clear there is going to be much demand for E.V.s, at least in North America,” said Sam Abuelsamid, an analyst at Navigant Research. “There’s probably going to be more demand in Europe and China, but if they can get the cost down to parity with internal combustion vehicles, then there may be potential.”

LG Chem is a major supplier of lithium-ion batteries to the auto industry and other sectors, with clients including Volvo. A financial filing in South Korea indicated that its investment in the joint venture would occur over four years.

G.M. is making a major push into electric vehicles, including 20 battery-powered models by 2023. It aims to sell one million such vehicles globally by 2026. Ms. Barra said G.M. expects to introduce a new Chevrolet electric car next year, and an electric truck in 2021. Its current model, the Chevrolet Bolt, is a compact car that has attracted modest interest from car buyers. G.M. sells roughly 1,500 Bolts a month in the United States, compared to the 30,000 cars Tesla tends to sell monthly around the world.



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