Plans for a $2.4 billion electric vehicle battery manufacturing plant that could potentially be located in northern Indiana are reportedly on hold indefinitely. The Wall Street Journal first reported on Friday that General Motors Co. (NYSE:GM) and Korea-based LG Energy Solution failed to reach an agreement to build a fourth plant through its Ultium Cells joint venture.
GM is reportedly in talks with at least one other battery supplier to move forward with the project, CNBC also reported on Friday. However, the automaker declined to provide details on the situation.
“We have made it very clear that our plan includes investing in a fourth cell plant in the United States,” GM said The Wall Street Journal.
The 2.5 million square foot manufacturing facility would be the fourth facility built by GM. The first three were founded by Ultium Cells; One is currently operational in Ohio and two are under construction in Tennessee and Michigan.
The fourth plant is expected to create around 1,600 jobs.
A 656-acre site at the Indiana Enterprise Center in New Carlisle is one of several being considered for the fourth plant. Last September, St. Joseph County Council approved tax incentives and an economic development agreement for the project should the site be selected.
Officials previously expected to make a decision and break ground in late 2022 or early 2023.
Jeff Rea, president and CEO of the South Bend Regional Chamber of Commerce, says that while the report is certainly a hit down the road, the project is not dead in the water.
Rea told Inside Indiana Business reporter Wes Mills Friday that the community remains excited about a potential opportunity with GM.
“We are in regular contact with them about the development of a site in New Carlisle. We spoke to them about this project just yesterday as we try to work through a lot of different details,” Rea said. “From day one, we’ve been mostly involved with GM; we were never involved in discussions with LG.”
Rea said he doesn’t think the situation is dire as some people believe and he might have been more concerned if the chamber hadn’t been in close contact with GM, as it has been since the stimulus package was approved.
“It can only mean that they take it in a different direction,” he said. “We’ve never talked about what another direction might look like, but we’re still in talks with them to build stuff here and we hope something moves forward at some point.”
Despite recent developments at GM and LG Energy Solution, Rea said local officials are still confident that the New Carlisle site will be chosen for the major project.
“We remain optimistic that our territory will play an important role in the EV industry, while also being optimistic about a potential partnership with GM,” said Rea.
GM expects to reach 1 million annual electric vehicle sales in North America by 2025. The automaker continues to make large investments related to electric vehicle production, particularly in Indiana.
Last September, GM announced it would invest nearly $500 million at its Marion Metal Center to add two press lines and upgrade equipment to support production of new and future EV models.
Two months later, the automaker announced a $45 million investment in its Bedford Casting Operations to support additional production of electric vehicle powertrain castings.
Spokesman Dan Flores said in a December interview with Inside Indiana Business that GM’s facilities in Indiana and elsewhere are key to the company’s goal of producing only electric vehicles for the light-duty truck market by 2035.
“Basically what we’ve said is that during this transition to an all-electric future, we’re going to take everyone with us,” Flores said. “How this impacts our manufacturing operations is over time, we will be transforming our facilities to not only support the current manufacturing of ICE vehicles, we will transition everything to that all-electric future.”
While reports were made Friday of the Ultium Cells plant being delayed, GM also announced an additional $64 million investment in its Rochester, NY, and Defiance, Ohio plants to produce castings and components for the to establish EV production.