Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
LG Energy Solution, General Motors show signs of drifting apart
Ultium Cells factory in Tennessee / Courtesy of Ultium Cells
By Park Jae-hyuk
US carmaker to ditch joint venture’s name for EV batteries
Uncertainties are growing regarding whether LG Energy Solution (LGES) will remain General Motors' main battery supplier as the U.S. carmaker has decided to drop the name of its joint venture with LGES for its electric vehicle (EV) batteries and supporting technologies.
During the Investor Day event on Tuesday, GM announced that it will phase out the Ultium brand for its EV batteries and technologies. However, the joint venture will continue to use the name Ultium Cells at its manufacturing sites and other facilities.
"It now makes business sense to transition from one-size-fits-all to new program-specific batteries," Kurt Kelty, GM's vice president of batteries, said.
"As we enter the next phase of our journey, the time is right to begin this transition."
Since Kelty and other former Tesla executives joined GM this year, the carmaker has sought to diversify its battery strategies, transitioning from pouch cells to different battery types and chemistries, including low-cost lithium iron phosphate (LFP) batteries.
Bloomberg also reported last month that GM is considering buying CATL's batteries.
Chinese companies have dominated the global LFP battery market, while Korean firms have focused on the market for high-priced ternary batteries, which have higher energy densities.
In August, GM signed a $3.5 billion deal with Samsung SDI to start the mass production of prismatic cells in Indiana in 2027, as LGES refused the U.S. firm’s request last year to build the fourth battery plant.
The refusal was attributed at that time to the uncertain macroeconomic outlook and a conflict between LGES and GM over how to respond to a unionization drive by workers at Ultium Cells' Ohio factory.
In July, Ultium Cells temporarily suspended construction of its third factory in Michigan due to declining global demand for EVs.
"Ultium Cells' sales volume is expected to fall during the fourth quarter, as the sales volume of GM's EVs in North America fell short of expectations," Kiwoom Securities analyst Kwon Joon-soo said.
LGES declined to comment on GM's recent announcement.
However, the Korean firm has also diversified its customers in recent years.
According to its regulatory filing, Tuesday, LGES signed a contract with a Mercedes-Benz affiliate to supply 50.5 gigawatts per hour in batteries from 2028 to 2038.
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In July, the Korean firm signed a deal to provide Renault with 39 gigawatts per hour in LFP batteries from 2025 to 2030.
The battery maker has also invested in the North American market with Stellantis and Honda.
Additionally, LGES has been trying to reduce its dependence on the struggling EV industry.
The company said Monday that it will focus more on energy storage systems and new application businesses with high growth potential, such as urban air mobility, vessels and robotics, to construct a more resilient business structure that can withstand market fluctuations.