General Motors Brings Battery Material Production to US, Signalling Increased Vertical Integration
A global semiconductor shortage has done little to deter automakers like General Motors from embracing an electric future.
Despite the automotive industry’s ongoing issues acquiring sufficient quantities of electronic components and semiconductors to meet vehicle production schedules, General Motors (GM) has made several moves in recent months to prepare for an organizational-wide transition to electric vehicles (EVs). Their most recent move: the creation of a joint venture with South Korea-based Posco chemical to open a North American facility to process cathode active material (CAM), which is critical to the creation of battery materials. According to reports, the facility will open in Lordstown, Ohio in 2022. Two more facilities are planned for 2025.
According to GM, CAM represents approximately 40% of the total cost of a battery cell. With this on North American soil, the risk for disruption in the face of any number of large-scale crises — such as a pandemic — will be significantly reduced. Indeed, this measure is in line with the agenda of the current U.S. administration, which has urged companies to bring semiconductor chip production to the U.S. to decrease dependency on Asian countries.
“This is going to be pretty significant investment for both GM and Posco,” Doug L. Parks, executive vice president of global product development, purchasing and supply chain at GM, during a recent media briefing.
Other announced plans for General Motors include a $35 billion investment into vehicle electrification through 2030, and a general shift toward vertical integration of motors and parts, as well as batteries. In response to the current supply chain environment, more companies in more industries are expected to make similar shifts.