General Motors Company (GM.US) is withdrawing from battery manufacturing, and Samsung SDI is taking complete control of the joint venture factory in the United States.

Against the backdrop of a continued slowdown in electric vehicle demand, General Motors Company (GM.US) has further contracted its battery manufacturing footprint. South Korean battery maker Samsung SDI announced on Tuesday that it will terminate its battery joint venture agreement with General Motors in the United States, specifically in Indiana, and will acquire GMs entire stake, transforming the factory into its first independent manufacturing base in North America. According to regulatory documents and statements from Samsung SDI, the company will acquire the 49.99% stake held by General Motors, thereby wholly owning the joint venture - SDI-GM Synergy Cells Holdings. This factory, originally planned to be a $3.5 billion investment covering 680 acres, was publicly announced two years ago and aims for mass production by 2027 with plans to employ 1,600 people. However, due to electric vehicle demand falling short of expectations, construction progress has been delayed. Although the building is now complete, no production equipment has been installed, and General Motors has invested approximately $300 million into the project. In its statement, Samsung SDI admitted that its decision took into account market changes since the announcement of the joint venture, particularly the underwhelming growth in electric vehicle demand. The two parties have decided to seek other forms of collaboration outside of the joint venture. After the transaction is completed, this factory will become Samsung SDI's first independent manufacturing center in North America, producing not only batteries for future electric vehicle production but also batteries for energy storage systems to meet the strong demand in the U.S. energy storage market. However, the original investment plans will be adjusted, and specific proposals have yet to be finalized. General Motors retreat from battery manufacturing marks the latest step in its long-term strategic recalibration. Previously, the company had hoped to achieve annual sales of one million electric vehicles in the U.S. by 2025, but actual demand has fallen far short of expectations. Additionally, the Trump administration's elimination of the $7,500 federal tax credit per vehicle has led GM to write down $11 billion on its electric vehicle projects. GM has also sold its stake in another planned battery factory to its other South Korean partner, LG Energy Solution, and repurposed an assembly plant in the Detroit suburbs to produce large fuel trucks and SUVs. The Ultium Cells plant that GM operates with LG Energy in Tennessee has also begun shifting some production capacity toward stationary storage batteries. Nonetheless, the two companies have not completely broken up. On the same day, Samsung SDI revealed that it had signed an agreement with General Motors to jointly develop the next generation of prismatic batteries, featuring high energy density and fast charging capabilities, for GMs future electric vehicle models. Samsung SDI stated, This decision reflects the changing market environment while preserving our strategic relationship with GM. At this factory, we will work together with GM for the future electric vehicle era while actively addressing the demand for U.S. energy storage systems. Currently, electric vehicles account for only about 5% of General Motors total sales, while hybrid models are performing more strongly in the U.S. market. GM CEO Mary Barra insisted that the company remains committed to the development of electric vehicles, but must adjust its production pace according to market demand. GM has now invested a total of $35 billion in autonomous driving and electric vehicle research and development.