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(Bloomberg) — General Motors Co. and LG Energy Solution plan to add more battery production lines at their joint venture plant in Tennessee to make lower-cost cells starting in late 2027, the companies said in a statement Monday. The amount of the investment was not disclosed.
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The Ultium Cells LLC plant in Spring Hill, Tennessee, will begin to make lower-cost lithium iron phosphate batteries, or LFP, in addition to more-expensive and longer-range nickel-based batteries. The new LFP batteries will enable GM to make more lower-priced electric vehicles.
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The news comes as most automakers are pulling back on electric vehicle investments in the US market. EV sales in the US have slowed and President Donald Trump’s tax bill cuts the $7,500 federal tax incentive for battery-powered models in September.
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But GM remains committed to EVs. After spending $35 billion to develop its Ultium battery platform and a dozen models, Chief Executive Officer Mary Barra sees electric drive as the long-term future and a near-term way to win over buyers as other automakers back off.
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In the first half of the year, GM’s EV sales more than doubled to more than 78,000 as its $35,000 Chevrolet Equinox EV sold near 28,000. This is the low-priced EV’s first year of full production.
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GM may be a lone bright spot in the market. In the first half of the year, US EV sales hit a record of 607,000 but declined in the second quarter, according to Kelley Blue Book. Tesla Inc. sales are on pace for their second annual decline.
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Barra hired former Tesla Inc. executive Kurt Kelty to rethink GM’s battery strategy. With him running the energy storage operations, GM has invested in LFP technology, different cell shapes that can store more energy on board and another chemistry called lithium manganese rich batteries that the company believes will lower EV costs and give drivers satisfactory driving range.
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Rival Ford Motor Co. has pulled back from EVs. The company scrapped plans for a three-row electric sport utility vehicle and pivoted toward hybrids and other vehicles that still run with a gasoline engine on board.
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The Ultium Cells Spring Hill plant currently employs about 1,300 people. A GM spokesman said the new investment will create more jobs there, though the company is not putting a number on staffing yet.
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