General Motors (GM.US) to exit battery manufacturing; Samsung SDI takes full ownership of the US joint venture factory

According to Golden Ten Data, in the context of persistently slowing demand for electric vehicles, General Motors (GM.US) is further scaling back its battery manufacturing plans. The South Korean battery manufacturer Samsung SDI announced on Tuesday that it will terminate its battery joint venture agreement with General Motors in Indiana, USA, and will acquire all GM’s shares in the partnership, transforming the plant into Samsung SDI’s first independent manufacturing base in North America.

According to Samsung SDI’s regulatory filings and statements, the company will acquire the 49.99% stake held by General Motors, thereby fully owning the joint venture—SDI-GM Synergy Cells Holdings. The factory, originally planned to be a $3.5 billion investment covering 680 acres in New Carlisle, Indiana, was announced with much fanfare two years ago, aiming for mass production in 2027 and employing 1,600 people. However, due to weaker-than-expected demand for electric vehicles, construction progress was delayed. Although the factory building is completed, no production equipment has been installed yet, and General Motors has already invested about $300 million into it.

In its statement, Samsung SDI acknowledged that its decision took into account the changes in the market since the joint venture was announced, especially the slower-than-anticipated growth in electric vehicle demand. Both sides decided to seek other forms of cooperation outside the partnership. After the transaction is completed, the factory will become Samsung SDI’s first independent manufacturing center in North America, not only producing batteries for future electric vehicles but also manufacturing energy storage system batteries to meet the strong demand in the U.S. energy storage market. The original investment plan will be adjusted accordingly, but the specific details are not yet finalized.

This move by General Motors to step back from battery manufacturing represents the latest adjustment in its long-term strategy. The company previously aimed to sell 1 million electric vehicles annually in the U.S. by 2025, but actual demand has fallen far short of expectations. In addition, the Trump administration’s cancellation of the $7,500 federal tax credit for electric vehicle purchases has led GM to write down a total of $11 billion across its electric vehicle projects.

General Motors also sold its stake in another planned battery plant to another Korean partner, LG Energy Solution, and has converted a suburban Detroit assembly plant to produce large gasoline-powered trucks and SUVs. The Ultium Cells plant, a joint venture with LG Energy Solution in Tennessee, has also begun shifting some of its capacity toward stationary energy storage batteries.

Nevertheless, the two sides have not completely “split.” Samsung SDI revealed on the same day that it has signed an agreement with General Motors to jointly develop next-generation prismatic batteries, which offer high energy density and fast charging capabilities for GM’s future electric vehicle models. Samsung SDI stated: “This decision reflects the changing market environment, while preserving our strategic relationship with General Motors. In this factory, we will work together with GM for the future era of electric vehicles, and actively respond to U.S. energy storage system demand.”

Currently, electric vehicles account for only about 5% of GM’s total sales, while hybrid models perform better in the U.S. market. GM CEO Mary Barra insists the company remains committed to developing electric vehicles, but must adjust production pace to match market demand. GM has invested a total of $35 billion in autonomous driving and electric vehicle research and development so far.