Investing.com — Automotive giant General Motors (NYSE:GM) plans to form a joint venture with POSCO Chemical (NYSE:PKX) to construct a factory in North America to process critical battery materials for GM’s Ultium electric vehicle platform.
GM has signed a non-binding term sheet with South Korean firm POSCO to create the joint venture. They expect to execute definitive agreements “soon.”
GM shares hit a high of $60.59 on the back of the news. They are trading up 0.7% in the mid-afternoon.
The factory will process Cathode Active Material (CAM), a key battery material that represents about 40% of the cost of a battery cell — a move from GM to take control of its supply chain and minimize disruptions after recent issues that saw a shortage of semiconductor chips.
The facility will open in 2024, with GM believing it will help scale battery cell production as it works toward its goal of becoming an EV leader in the U.S. In addition, the company is launching more than 30 EVs globally by 2025, including the GMC Hummer EV, the Cadillac LYRIQ, and the Chevrolet Silverado EV.
“Our work with POSCO Chemical is a key part of our strategy to rapidly scale U.S. EV production and drive innovation in battery performance, quality and cost,” explained Doug Parks, GM executive vice president for Global Product Development, Purchasing and Supply Chain.