General Motors and South Korea’s LG Chem have announced plans to mass-produce battery cells for future electric vehicles. Together, the companies will invest up to a total of $2.3 billion (RM9.6 billion) through a new, equally owned joint venture company.

The JV will establish a battery cell assembly plant on a greenfield manufacturing site in the Lordstown area of Northeast Ohio that will create more than 1,100 new jobs.

The two companies said that the plant will use the most advanced manufacturing processes to produce cells efficiently, with little waste, and will benefit from strong economies of scale, while being extremely flexible to adapt to ongoing advances in technology and materials. The collaboration also includes a joint development agreement to develop and produce advanced battery tech, with the goal of reducing battery costs to industry-leading levels.

“Combining our manufacturing expertise with LG Chem’s leading battery-cell technology will help accelerate our pursuit of an all-electric future. We look forward to collaborating with LG Chem on future cell technologies that will continue to improve the value we deliver to our customers,” said GM chairman and CEO Mary Barra.

In addition to vertically integrating the manufacturing of battery cells in the US, LG Chem will gain access to an experienced workforce. It will also benefit from a dedicated production stream of future EVs from GM’s next generation of EVs, including an all-new electric truck coming in the fall of 2021.

“Our joint venture with the No.1 American automaker will further prepare us for the anticipated growth of the North American EV market, while giving us insights into the broader EV ecosystem. Our long-standing history with General Motors has proven our collective expertise in this space, and we look forward to continuing this drive for zero emissions,” said LG Chem vice chairman and CEO Hak-Cheol Shin.

This investment builds on GM’s $28 million (RM116.6 million) investment in its Warren, Michigan battery lab announced late last year. Groundbreaking is expected to take place in mid-2020.

Those who follow North American industry news would find the Lordstown name familiar. The Ohio site was the home of the Chevrolet Cruze, which production has been discontinued as demand for the compact sedan has dwindled. The job losses became a political issue that president Donald Trump got involved in.

That old Lordstown facility is set to come to life again, as GM recently sold the complex to Lordstown Motors Corp (LMC), a new EV start-up that is working on an electric truck called Endurance. LMC has hired Rich Schmidt, a former director of manufacturing at Tesla, as chief production officer, and intends to start making the electric trucks by the end of 2020.