Plans by General Motors and partner LG Energy Solutions to construct a fourth U.S. EV battery plant have been put on hold for the time being. On the same day that GM announced plans to invest $854 million to retool plants in Flint, Michigan, New York state, and Ohio to build the sixth generation of the automaker’s small block V8 – the most recent iteration of a combustion engine family that dates back to the 1950s – news of the decision to slow investment in EV battery production broke.
How come? GM won’t comment. The decisions, however, indicate the following factors: Sales of V8-powered pickup trucks and SUVs in the US account for the majority of GM’s global revenues. maintaining that franchise over the next few years as fuel economy and pollution rules tighten.
Over the following ten years, it’s unclear how many electric vehicles will be sold in the United States. Over the next few years, according to many forecasters and analysts, U.S. EV demand will outpace supply. As dozens of new EV models compete for market share and consumer attention, the price battle Tesla started this month may serve as a preview of upcoming attractions.
With three U.S. battery facilities now under construction, GM and LG are launching them more slowly than GM had intended. GM is reviewing its spending as it prepares for a potential recession, and delaying another $2 billion plus battery investment until the first three plants are tested seems wise.
The battery industry is rapidly evolving. The first three Ultium battery factories built by GM are intended to make nickel-cobalt batteries. Ford and other producers, though, are switching to less expensive lithium-iron chemistries. The arrival of solid state batteries is predicted to be imminent, and GM is funding businesses looking into different potential chemistries.
Ford is simultaneously eliminating thousands of positions in Germany related to product development, and the German IG Metall union has vowed to fight back. Jim Farley, the CEO of Ford, has been forewarning that the switch to EVs will lead to layoffs and corporate reorganisation. Ford announced plans to reduce 3,000 employees from its North American and Indian staffs in August of last year.
According to union leaders, Ford is now preparing to lay off up to 65% of its German product engineering employees and move the work to the US. The cuts cast greater doubt on the future of Ford and Volkswagen’s joint EV project. In contrast to VW, who is rethinking its software strategy, Ford executives have indicated they believe they have a competitive software and electronics architecture locked in for future EVs. Ford releases its fiscal year 2022 results on February 2.
Ford Motor Company, also known simply as Ford, is a global American automaker with headquarters in Dearborn, Michigan. Henry Ford formed it, and on June 16, 1903, it became a legal entity.
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