GM’s new Canada factory will be key to Michigan electric vehicle production

General Motors will build a new factory in Quebec, Canada, as part of a joint venture with a South Korean chemical maker that will be key to Michigan’s future building electric vehicles.

On Monday, GM and POSCO Chemical said they are working with the governments of Canada and Quebec to build a new factory in Bécancour, Quebec, which is about midway between Montreal and Quebec City.

Construction of the new factory, which will begin immediately, will cost about $400 million ($500 million Canadian). It will create 200 jobs once it’s operating in 2024, GM said. It will eventually feed critical battery materials to several U.S. battery plants, including one to be built in Lansing.

“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 of Global Product Development, Purchasing and Supply Chain, said in a statement.

Material comes to Michigan

In December GM signed a “non-binding term sheet” to create a joint venture with POSCO. The automaker executed definitive agreements with POSCO in the first quarter. POSCO is the majority owner, GM said.

GM declined to provide dollar figures of its savings in battery cell development from the joint venture “due to competitive reasons,” said GM spokesman David Barnas.

But for a previous story, Parks said that “we hope to yield significant cost reduction in this space” from processing cathode active material with POSCO versus buying it from a supplier.

The new facility, once running, will make cathode active material, or CAM, for GM’s Ultium batteries. CAM is a key battery ingredient consisting of processed nickel, lithium and other materials representing about 40% of the cost of a battery cell, Parks said.

The Quebec site’s construction will allow for future expansion as GM continues to pursue other potential EV supply chain projects, Parks said.

Unifor, the union that represents Canada’s autoworkers, said GM’s decision to build a factory in Canada is good news for the country and its workforce.

“Today’s announcement by GM is the latest in a series of good news stories, further proving that Canada has everything it takes to be a world leader in electric vehicle and critical component manufacturing all across the supply chain,” said Shane Wark, Unifor assistant to the national president, in a statement. “Unifor welcomes this announcement and hundreds of new auto sector jobs to Bécancour.”

GM’s Ultium platform and battery cells will power upcoming EVs such as the Chevrolet Silverado EV pickup, GMC Hummer pickup and SUV and Cadillac Lyriq SUV.

GM just started building the Hummer EV at Factory ZERO in Detroit and Hamtramck late last year. That plant also will build a Hummer SUV, Cruise Origin and the 2024 Silverado EV in the future.

GM also will spend $4 billion to convert its existing factory in Orion Township to make Silverado electric pickups. GM has said it will spend about half a billion dollars to make upgrades to its two existing vehicle assembly plants in Lansing.

GM’s new U.S. plants

The Quebec facility will supply CAM to the Ultium Cells LLC facilities that GM and LG Energy Solutions are building as part of that joint venture.

One of those plants will be in Lordstown, Ohio, which starts operating this year.

Construction continues on a second Ultium Cells plant in Spring Hill, Tennessee. GM will start building the 2023 Cadillac Lyriq this spring at nearby Spring Hill Assembly.

In January, GM said it will invest $7 billion in Michigan factories over the next few years, which will create 4,000 jobs and retain another 1,000 jobs. That breaks down to GM spending $2.6 billion to build a new battery factory in the Lansing area. The 2.8 million-square-foot facility is scheduled to open in late 2024.

GM has said it will build a fourth Ultium Cells factory, but it has not disclosed the location yet.

GM also is investing more than $1 billion at its manufacturing complex in Ramos Arizpe, Coahuila, Mexico, for a new paint shop and innovative technology. That complex will start operations in June 2021 to build 2023 model year EVs.

In January 2021, GM said it would invest $800 million to convert CAMI Assemblyin Ingersoll, Ontario, to Canada’s first large-scale electric delivery vehicle manufacturing plant building electric commercial vans for GM’s start-up BrightDrop.

“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,” said Scott Bell, president and managing director, GM Canada.

Made in North America

GM is investing $35 billion through 2025 to develop EVs and self-driving cars. It has said it will introduce 30 new EVs globally by middecade with plans to deliver more than 1 million annual global EV sales by 2030.

POSCO said in December the joint venture will help it advance its own research and accelerate the adoption of EVs based on product development, mass production capacity and raw materials competitiveness.

“POSCO Chemical is set to expand battery material supplying capability across North America through establishing a cathode material plant in Canada,” POSCO CEO Min Kyung-Zoon said in a statement.

By the end of 2025, GM has said it plans to have 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.

GM’s new Canada factory will be key to Michigan electric vehicle production

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