General Motors Building a New Electric Vehicle Battery Factory

December 6, 2019
154 Views

General Motors Co. (NYSE: GM) is working to secure its position as an electric vehicle leader with a new battery factory project in Ohio.

The company, which is the seventh-largest manufacturer in the world by revenue, will partner with South Korea’s LG Chem to develop the joint venture.

The plant will receive an investment of up to $2.3 billion and will create 1,100 new jobs in the automotive industry.

Construction to Begin Next Year

General Motors and LG Chem will split the investment evenly, with groundbreaking expected by the second half of 2020. The factory will be located near Lordstown, Ohio, where GM previously operated a car-assembly plant with 4,500 workers. The new factory should help to reinvigorate the local economy while leveraging the talent of experienced automotive workers who still reside in the region.

When announcing the new factory, GM CEO Mary Barra said that “With this investment, Ohio and its highly capable workforce will play a key role in our journey toward a world with zero emissions. Combining our manufacturing expertise with LG Chem’s leading battery-cell technology will help accelerate our pursuit of an all-electric future.”

General Motorsis already one of America’s largest electric vehicle producers. It currently offers the Chevrolet Volt, a plug-in hybrid, as well as the all-electric Chevrolet Bolt. Only Tesla and Toyota sell more electric vehicles in the U.S.

New Factory Will Establish General Motors as an Electric Vehicle Leader

This significant investment is part of a long-term strategy designed to turn GM into an electric vehicle leader. Tesla has dominated the market in the United States. GM plans to use its new battery factory to support a lineup of 20 electric vehicles by 2023.

Electric vehicles make up just 1.5% of new vehicle sales in the U.S. today. Analysts expect that the figure will increase to 7.5% by 2030. The new factory will make General Motors the only other automaker besides Tesla with an in-house battery manufacturing facility in the United States.

Investors Should See Potential in This Development

General Motors has vastly underperformed the stock market this year, with just 5.56% growth in share price. As a long term pick, the stock now looks more promising. GM already has extensive manufacturing and assembly plant facilities for its vehicles. With a new battery plant, it will be able to produce for the local market without having to rely on external suppliers.

As an investment, GM’s relatively low price makes it interesting. It also comes with a 4.30% dividend yield, making it compelling for long-term investors focused on retirement and wealth generation.

You may be interested

Pork Farmers Will Benefit from China Trade Deal
Business
4 views
Business
4 views

Pork Farmers Will Benefit from China Trade Deal

Becky H - January 20, 2020

China and the United States signed a much-publicized Phase One Trade Deal last week, setting a framework for better relations…

Google Hits $1 Trillion Market Cap
Business
29 views
Business
29 views

Google Hits $1 Trillion Market Cap

Adam R - January 17, 2020

Google parent company, Alphabet Inc. (NASDAQ: GOOGL), is now the third U.S. company to break $1 trillion in market capitalization…

Phase One Trade Deal Signed Between U.S. and China
Investing
39 views
Investing
39 views

Phase One Trade Deal Signed Between U.S. and China

Becky H - January 16, 2020

The United States and China have taken a huge step forward in trade negotiations, with the signing of a Phase…