General Motors Co. (GM, Financial) said on Monday that, together with South Korean chemical maker POSCO Chemical Ltd. (XKRX:003670, Financial), it is working with the governments of Canada and Quebec to build a new facility in Bécancour, Quebec, estimated at $400 million.
The new facility will produce cathode active material for GM’s Ultium batteries, which will power electric vehicles such as the Chevrolet Silverado EV, GMC HUMMER EV and Cadillac LYRIQ.
The companies previously announced plans to form a CAM processing joint venture in December 2021, majority owned by POSCO Chemical, GM said. Construction on the new facility, which the joint venture will operate, will begin immediately and will create approximately 200 jobs. The site’s construction will allow for future expansion opportunities as GM continues to pursue many potential future EV supply chain projects.
At midday on Monday, GM shares were trading at $40.75, down 3.94% or $1.64 per share.
General Motors' stock fell recently after it was downgraded on Wall Street. Morgan Stanley analyst Adam Jonas said he has concerns about the company’s ability to transition to an all-electric future.
“GM and our supplier partners are creating a new, more secure and more sustainable ecosystem for EVs, built on a foundation of North American resources, technology and manufacturing expertise,” Doug Parks, GM executive vice president, Global Product Development, Purchasing and Supply Chain, said in the release. “Canada is playing an important role in our all-electric future, and we are grateful for the strong support we have received from local, provincial and national officials to grow a North American-focused EV value chain.”
The Quebec site will process CAM, a key battery material consisting of components like processed nickel, lithium and other materials representing about 40% of the cost of a battery cell.
“It is so exciting to see GM Canada and Quebec playing a key role in building the emerging ‘mines to mobility’ EV battery ecosystem in North America,” Scott Bell, president and managing director, GM Canada, said. “With this new processing facility in Bécancour, GM will help lead the EV battery supply chain while also launching Canada’s first full EV manufacturing plant in Ingersoll, Ontario, later this year.”
As for POSCO Chemical, CEO Min Kyung-Zoon said the company "is set to expand battery material supplying capability across North America through establishing a cathode material plant in Canada.”
“We will lead the successful transition to the EV era by further strengthening the strategic partnership with GM and securing a production line with world-class technological competitiveness,” he said.
By the end of 2025, Detroit-based GM plans to have the capacity to build 1 million electric vehicles in North America, and the company targets the majority of components by value to be sustainably sourced, processed or manufactured in North America, executives said.
Unifor, the union that represents Canada's autoworkers, did not immediately provide a comment, according to the Detroit Free Press.
GM has announced a series of actions to create a new and more secure EV supply chain, including projects targeting key EV materials and components:
- Lithium with controlled thermal resources (CTR) to secure lithium produced by the first stage of its Hell’s Kitchen Project in California.
- Rare earth materials with GE, to develop a rare earth value chain.
- Alloy flakes with MP Materials, who will establish the first North American processing site for alloy flakes. The company will then expand into magnet manufacturing around 2025 at its new production facility in Fort Worth, Texas.
- Permanent magnets with VAC, the largest producer of permanent magnets in the Western Hemisphere with nearly 100 years of experience. VAC will establish a North America footprint to support GM’s magnet requirements starting in 2024, including locally sourced raw materials and finished magnet production.
