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Production at an electric vehicle battery cell plant jointly run by General Motors and Samsung SDI has been delayed as EV sales have slowed in the U.S.
The companies finalized their agreement Tuesday to jointly run the new factory in New Carlisle, Indiana, near South Bend, but said production would not start until 2027. Previously the plant was expected to start making cells in 2026.
The delay will be less than a year, due to market conditions and working out contract details, GM said. Construction of the factory is already under way.
The 2.5 million-square-foot facility is being built on a 656-acre site at the Indiana Enterprise Center. The project is expected to bring 1,700 manufacturing jobs to the area.
Bill Schalliol, executive director of economic development for St. Joseph County, said now that the joint venture deal is complete, the bulk of the construction work can take place, and that is expected to take about two years to complete.
Electric vehicle sales in the U.S. are still growing but have slowed as more practical consumers worry about range and the ability to recharge while traveling. Market leader Tesla Inc. has cut prices, forcing others to follow.
U.S. electric vehicle sales overall rose about 7% during the first half of the year, to 599,134, Motorintelligence.com reported. EVs accounted for 7.6% of the U.S. new vehicle market, about the same as it was for all of last year. Lease deals, which include federal tax credits, helped to boost sales.
GM and Samsung announced the joint venture in June of last year. The $3.5 billion plant is being built on a 680-acre site and is expected to employ 1,600 workers. It will make nickel-rich prismatic batteries that store more energy than other chemistries, lowering costs and improving driving range, the companies said.
The plant also will help Samsung get into the North American EV market, selling cells to other companies.
The project is GM’s fourth joint venture battery cell factory. It has announced three others with South Korea’s LG Energy Solution. A 900-worker factory near Warren, Ohio, already is making cells, as is a plant in Spring Hill, Tennessee. Another in Lansing, Michigan, is being built.
GM switched to Samsung after several recalls of Chevrolet Bolt electric vehicles equipped with LG batteries due to manufacturing defects that could cause fires.
Automakers mainly in the U.S. and Europe have delayed battery and electric vehicle production as sales have slowed. Last week, Ford announced it would postpone a new big electric pickup truck by 18 months and scrub a new large electric SUV with three rows of seats. Instead it will focus on electric midsize pickups and a commercial van, as well as gas-electric hybrids.
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Sounds like a delay for 1600 jobs. UAW is going to love that.