GM sells stake in Michigan EV battery factory subsidized by state

• GM will sell its stake in the Delta Township EV battery factory it built under the Ultium Cells brand
• Former partner LG Energy Solution will complete the factory and operate it
• Michigan awarded GM nearly $200 million in public subsidies to the project

General Motors is selling its stake in a large-scale electric vehicle battery factory that company officials once promised would help make Michigan the “epicenter” of the EV industry.

The Detroit automaker announced Monday that it has reached a non-binding agreement to sell its share of the nearly completed Ultium Cells LLC battery plant in Delta Township, just west of Lansing. 

When the deal concludes, the factory will be owned and operated by GM’s joint venture partner in the property, South Korea-based LG Energy Solution.

The battery plant, which is still slated for completion, was announced with fanfare in early 2022 after Michigan officials approved $186 million in subsidies. The economic development incentives — paired with a $480 million award for GM to expand its EV factory in Orion Township — represented the largest incentives in the state’s history. 

The awards were the first made under the Strategic Outreach and Attraction Reserve (SOAR) Fund, a bipartisan fund initiated by Gov. Gretchen Whitmer that allocated $2 billion toward large-scale economic development. 

Most of the deals were for EV battery factories that promised thousands of jobs before the EV industry’s growth sputtered, creating delays and raising questions among legislators about the value of the projects.

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A Bridge investigation this year showed that the state has spent at least 91% of the $186.1 million it promised toward the new factory, including $120 million given directly to GM. In addition, tax breaks on the property are estimated at $158 million.

GM’s announcement comes as Michigan’s legislative session nears an end with several of Whitmer’s economic development initiatives stalled and lawmakers from both parties questioning incentive awards. 

Whitmer’s administration referred questions to the Michigan Economic Development Corporation. 

Spokesperson Otie McKinley told Bridge the incentive deal remains on track, even with the sale by GM. The state plans to review contracts to see if amendments to the original deals are necessary. 

“The commitment to move forward with the Ultium facility in Delta Township remains, including the thousands of good-paying, permanent jobs it will bring to the community,” McKinley said.

Costing up to $2.5 billion, the 2.5 million-square-foot battery factory in Delta Township was to employ up to 1,700 workers, though opening had been delayed from this year to 2025. It sits on former GM land adjacent to the automaker’s Delta Township Assembly factory.

However, hiring at the battery factory is ramping up and will continue under Ultium Cells, GM said Monday. 

“Ultium Cells Lansing currently has nearly 100 employees and remains on track to meet its previously announced employment commitments,” according to the automaker.

“ LG Energy Solution will have immediate access to the nearly completed Lansing facility to begin the installation of equipment. ”

Construction at the factory “ is substantially complete,” Ultium communications manager Katie Burdette told Bridge in November. 

“We remain in process (on the) equipment installation phase,” she said. 

Burdette did not directly reply to Bridge's questions about battery capacity at the Michigan factory in comparison to other Ultium factories in Warren, Ohio, and Spring Hill, Tenn. Both are making batteries for GM’s EVs, and that will continue, the automaker said Monday.

“We will scale capacity at Lansing the same way we did at our Warren and Spring Hill plants: based on customer demand,” Burdette said.

Demand for EVs has slowed global production despite massive investments made in factories in Michigan and across the U.S.

The capital investment has not yielded profitability on the EVs, though GM has said it is getting closer to achieving that. 

However, President-elect Donald Trump also has said he plans to end EV subsidies when he returns to office in January, a situation that raises many questions about ongoing EV sales. 

Paul Jacobson, GM executive vice president and CFO, said Monday that the automaker does not need the additional capacity at the Delta Township factory. 

"We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner,” Jacobson said in a statement.

Ultium did not release information on its customer for batteries made at the Delta Township facility. The company will be making batteries for Ford Motor  Co. in its Holland factory, LGES told Bridge previously.

The company will have until Dec. 31, 2030, to reach its 1,700 hiring milestone for the state incentive, according to its contract with the Michigan Economic Development Corporation. 

GM did not release details on the sale, but said it expects to recoup its investment in the facility, which reportedly totaled around $1 billion. The transaction is expected to close in the first few months of 2025.

Construction of the Lansing-area EV factory has also been facilitated by federal loans as part of a $2.5 billion award to help Ultium build facilities in Michigan, Ohio and Tennessee. 

GM's decision to sell its share in the Michigan plant comes as the automaker seeks additional tax incentives to redevelop the Renaissance Center in Detroit, a plan that has drawn criticism from some state lawmakers. 

“Sadly, and for far too long, Michigan’s leaders have bent over backward to pay taxpayer money to appease GM,” House Minority Leader Matt Hall, R-Richland Township, said Monday in a statement. 

“For a while, I have questioned GM’s commitment to our state, and this latest development solidifies those concerns.”