LG Energy Solution will receive all corporate incentives through its purchase of General Motors’ shares of the Ultium Cells electric vehicle battery facility in Lansing, Michigan.
On March 25, the semi-public Michigan Strategic Fund approved the transfer of subsidy terms the state had granted GM to LG. The project amendments “do not impact or revise the timing, the job commitments or minimum investment requirements” of the project, according to the Michigan Economic Development Corporation, which administers the program.
GM announced the sale of the Lansing battery plant in December 2024, indicating that its two currently operating battery plants in Spring Hill, Tennessee and Warren, Ohio were sufficient to meet its EV demand.
“We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner,” GM executive vice president and CFO, Paul Jacobson, said in a statement announcing the sale.
Last year, GM scaled back its EV production targets, citing slowing demand. In October, it dropped its use of the Ultium Cells brand name. During GM’s October 2024 Q3 investor call, CEO Mary Barra said the company was “focused on restructuring actions to make the business sustainable and profitable” and promised news concerning “capital efficiency.”
After the sale of its stake in the Lansing plant, GM expects to recoup its $1 billion investment in the project.
Michigan announced its subsidy plan for GM and the Ultium Cells plant in January 2022. The project was anticipated to begin production in 2024 and expected to create 1,700 jobs by 2025.
At the time of the sale announcement last December, the Lansing facility was almost complete and had nearly 100 employees. The staff will become LG employees upon completion of the sale, which is expected to close by May 31.
LG will instead manufacture batteries for Toyota at the plant, as the carmaker has agreed to shift a $1.5 million battery order from a different Michigan plant to the Lansing plant after LG’s deal with GM is finalized.
Per the terms of the incentive agreement Michigan transferred to LG, the company will commit to creating at least 1,360 jobs.
“Reassigning incentives to LGES as the new owner of the Lansing facility will ensure it remains a catalyst for continued investment in the region and accelerates cell production,” the Michigan Economic Development Corporation said in a press release following board approval of transferring the agreement.
The state already paid Ultium Cells a $120 million grant in full between June and September 2023, according to The Detroit News.
