Published on January 9th, 2020 | by Zachary Shahan0
GM & LG Chem’s 30+ GWh Ohio Battery Gigafactory Highlights Rapid EV Industry Progress
January 9th, 2020 by Zachary Shahan
“Gigafactory” isn’t yet in a Merriam-Webster dictionary, as far as I’ve seen, but it’s a fun term that Tesla CEO Elon Musk coined years ago for a large battery factory producing many gigawatt-hours worth of batteries a year. The original plan for Tesla’s first gigafactory, located in Nevada, was 35 gigawatt-hours (GWh) of annual production capacity, which was seen as a wild goal at the time — and many critics thought it would never come about. The market has changed much since then, and just one month ago GM and LG Chem announced a joint venture to build a 30+ GWh battery factory in Ohio, and drive down battery costs in the process. From the press release, it’s noted that the partnership aims to “drive cost per kilowatt hours to industry-leading levels.”
The two companies will equally own the joint venture, 50–50. Together, they’re putting in $2.3 billion to develop the gigafactory. (By the way, they don’t use the term gigafactory, just calling it a manufacturing facility or complex.)
The batteries will be used in GM electric vehicles, demonstrating that GM has more significant plans for vehicle electrification output than is probably presumed based on what’s on the market right now and the models expected to come to market in the next few years. Though, GM has indicated an intention to electrify more rapidly from the top down, starting with its Cadillac brand, which could be 100% electric by 2030. The images that came along with this press release implicitly reference the Cadillac plans.
Approximately 4 new fully electric Cadillac models will be coming out within the next two years. GM has hinted at an electric XT6 crossover, Escalade SUV, and high-performance sedan.
As noted in the headline, GM and LG Chem expect to directly produce 1,100 jobs in Ohio with this gigafactory. “With this investment, Ohio and its highly capable workforce will play a key role in our journey toward a world with zero emissions,” said GM Chairman and CEO Mary Barra. “Combining our manufacturing expertise with LG Chem’s leading battery-cell technology will help accelerate our pursuit of an all-electric future. We look forward to collaborating with LG Chem on future cell technologies that will continue to improve the value we deliver to our customers.”
This partnership goes on top of GM’s previous $28 million investment in a battery lab in Warren, Michigan, which was revealed in late 2018. Ground is supposed to be broken on the new battery gigafactory in the Lordstown area of Northeast Ohio in the middle of this year, 2020.
GM and LG Chem have worked together for years, most notably collaborating to get the Chevy Bolt EV onto the US market before any other long-range, basically affordable electric vehicle. The new partnership indicates that the companies have worked together well in the past and appreciated what each partner contributed.
LG Chem is seen as an EV battery leader around the world and has contracts with many of the world’s automakers. However, it is a big step further to fully partner on an EV battery factory.
Overall, a takeaway from this story that I think stands out the most is how much the EV industry has changed in a handful of years. When Tesla announced its Gigafactory 1 plan in 2014, it was seen by many as a shocking, idealistic dream. (Some saw it as a logical, necessary step in the electrification of transport and assumed other automakers would need to do the same thing.) In the past year, Tesla has built the first phase of a second gigafactory, Tesla has announced a third gigafactory (in Germany) that it will break ground on soon, and GM and LG Chem have announced this Ohio gigafactory, the industry response to which seems to be “duh” rather than “wow.” That said, I think this is another major moment or milestone in the industry, as it’s one of a few recent announcements that have shown conventional automakers are increasingly acting like Tesla and showing an intention to genuinely mass produce electric vehicles and try to be leaders in this world in the 2020s and beyond.
Do I think GM and LG Chem should have run with the fun and called this Ohio complex a gigafactory? Naturally, I do, but much more important than terminology is putting the money down, building the factories, and putting zero-emissions electric vehicles onto the road as soon as possible.
I’ll end on a quote that is sure to ruffle some feathers and fill others with pride:
“Our joint venture with the No. 1 American automaker will further prepare us for the anticipated growth of the North American EV market, while giving us insights into the broader EV ecosystem,” said LG Chem Vice Chairman & CEO Hak-Cheol Shin.
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