GM (General Motors) announced a plan to cooperate with POSCO Chemical to develop a North American facility to create materials for battery cathodes, taking another move toward vertically integrating its electric car supply chain.
It’s a significant step forward for GM, the auto industry, and even the United States. On the announcement, GM (ticker: GM) shares rose around 3.7 percent to little under $60 by midday on 1 December. The stock ended the day at $58.06, up 0.4 percent.
The S&P 500 and Dow Jones Industrial Average both finished 1.2 percent and 1.3 percent lower, respectively, after giving up early gains. Trading volatility continues to be generated by the Omicron form of Covid-19.
GM has enormous aspirations for electric vehicles: by 2035, it aims to sell solely electric automobiles. Meanwhile, it has declared plans to invest $35 billion in car development and manufacturing capacity in order to achieve this goal. GM wants to develop battery factories with ally LG Chem in addition to traditional assembly operations (051910. Korea).
That’s where the new plant comes into play. Most cathode materials are currently made in Asia (cathodes and anodes are the two sides of a battery that permit the transfer of power). Bringing production to the United States saves money while also giving GM more power oversupply as well as technological development.
In a statement, Doug Parks, who works as the GM executive vice president in charge of the Global Product Development, Purchasing and Supply Chain, stated, “Our partnership with POSCO Chemical is a crucial part of our goal to rapidly grow U.S. EV production and spur innovation in battery performance, quality, and cost.” “We’re establishing a North American-focused, sustainable, and resilient EV supply chain that spans the full ecosystem, from raw materials through battery cell manufacture and recycling.”
Iron, nickel, cobalt, and lithium are among the cathodes that EV investors are hearing about these days. The materials will be delivered to the new plant in this manner. The supply of such components is another step back in the EV supply chain.
The plant’s cathode materials will be used in GM’s new battery facilities, which will supply the automaker’s assembly lines. The supply-chain work, as well as GM’s research and development, are all aimed at lowering costs. That might help GM build a Chevy EV crossover that is somewhere between a sedan as well as an SUV, with a starting price of around $30,000 by the middle of the decade, as management has stated.
At an investment conference, CFO Paul Jacobson said cathodes are “approximately one-third to half the price of the battery and it constitutes a very big function in regards of driving capacity.” “As [GM] takes the long-term view along this journey to the EV transformation, this is the first of many announcements we’ll be talking about in the coming months and years.”