General Motors has announced the sale of its stake in an electric vehicle (EV) battery facility to its partner LG Energy Solutions. The nearly completed factory in Lansing, Michigan, was being developed by Ultium Cells LLC, a joint venture between GM and South Korea's LG. Following the non-binding agreement, LG will become the sole owner and complete the plant, selling batteries to other customers. GM will recover its $1 billion investment in the factory.

The sale does not mark the end of the partnership between GM and LG. The two companies will continue to jointly develop prismatic battery cells, a type of rectangular battery that can hold more energy capacity than cylindrical cells. Prismatic cells are packed flat in rigid cases and are generally thought to be less complex to manufacture. This collaboration will enable GM to further simplify its supply chains and benefit from financial incentives offered by the Biden administration.

GM's decision to sell its stake in the factory comes as the automaker claims it is close to making a profit on its EV business. The company's ability to mass produce batteries domestically has been a key factor in its progress, allowing it to reduce costs and increase efficiency. However, the future of EV subsidies remains uncertain, with Donald Trump vowing to cancel them if he assumes office. This could potentially derail GM and other automakers' efforts to develop profitable EV businesses.

Despite the uncertainty, GM remains committed to its EV strategy. "We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital-efficient manner," said Paul Jacobson, GM's chief financial officer. "When completed, this transaction will also help LG Energy Solution meet demand by leveraging capacity that's nearly ready to come online and it will make GM even more efficient."

The partnership between GM and LG is not limited to the Lansing factory. The two companies already jointly develop batteries at factories in Warren, Ohio, and Spring Hill, Tennessee, where they produce batteries for the Cadillac Lyriq and Chevy Equinox EVs. GM also has a battery factory in joint ownership with Samsung SDI in New Carlisle, Indiana. Following the sale, the number of battery factories in the US owned by GM will drop to three.

The development of prismatic battery cells is a significant step forward for GM and LG, as it could lead to more efficient and cost-effective battery production. As the EV market continues to grow, the ability to mass produce high-capacity batteries will be crucial for automakers to remain competitive. GM's partnership with LG positions the company well to capitalize on this trend and drive further innovation in the EV space.

In conclusion, GM's sale of its stake in the Lansing factory to LG Energy Solutions marks a significant shift in the company's EV strategy. While the sale may raise concerns about GM's commitment to its EV business, the continued partnership between the two companies and their focus on developing prismatic battery cells suggest that GM remains dedicated to driving innovation in the EV space.