General Motors to Sell Michigan Battery Plant to LG Energy for $2B

General Motors Company GM will sell its entire stake in the Lansing, MI, battery plant to LG Energy Solution, a leading EV battery manufacturer in South Korea, for about $2.08 billion. The deal is expected to close by May 31, 2025, and will enhance LG Energy’s U.S. battery production. It will help the battery maker secure supply commitments for Japanese automaker Toyota Motor Corporation TM.By acquiring the Ultium Cells No. 3 plant, LG Energy will streamline its manufacturing operations and avoid investing in new facilities. The purchase aligns with its annual capital expenditure plan and won’t require additional funding. The acquisition enables LG Energy to fulfill a 10-year contract with Toyota, supplying 20 gigawatt-hours of nickel, cobalt, manganese and aluminum battery modules annually, sufficient for about 200,000 high-performance EVs. LG Energy had already announced plans to cut facility investments by 20-30% from its 2023 budget of $8.8 billion. After due diligence, the company suggested that the final cost of the Lansing plant could be lower than the estimated $2 billion.GM’s decision to divest comes as it scales back EV expansion due to slowing sales and policy uncertainty under the Trump administration. While exiting the Michigan plant in December 2024, GM confirmed that it will continue its battery joint ventures with LG Energy in Ohio and Tennessee.For 2025, General Motors anticipates a slight decline in internal combustion engine wholesale volume in North America, though EV growth should partially offset the impact. The company also expects pricing to decline 1-1.5% year over year, reflecting potential higher incentives or a moderation in ATPs, which could put some pressure on margins. High warranty and labor costs are also expected to limit the profits of the automaker. GM’s Zacks Rank & Key PicksGeneral Motors carries a Zacks Rank #3 (Hold) at present.Some better-ranked stocks in the auto space are China Yuchai International Limited CYD and Strattec Security Corporation STRT, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for CYD’s 2025 sales and earnings indicates year-over-year growth of 9.17% and 36.84%, respectively. EPS estimates for 2025 have improved 25 cents in the past 60 days. The Zacks Consensus Estimate for STRT’s 2025 sales indicates year-over-year growth of 2.61%. EPS estimates for 2025 and 2026 have improved 91 cents and $1.06, respectively, in the past 60 days.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Toyota Motor Corporation (TM): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report Strattec Security Corporation (STRT): Free Stock Analysis Report China Yuchai International Limited (CYD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks