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The automaker is incurring US$1.6 billion in charges tied to its pullback from EVs
By Mathieu Dion
General Motors Co. and a partner have paused the second phase of a cathode factory in Quebec, resulting in the cancellation of a nickel sulfate project by Vale SA.
GM agreed in 2022 to buy nickel supplies from the Brazilian miner as part of a strategy to build up its battery supply chain for electric vehicles. But weaker-than-expected demand and U.S. policy changes that make EVs less attractive have prompted companies to reconsider investment projects.
The automaker said this week it’s incurring US$1.6 billion in charges tied to its pullback from electric vehicles. Realigning EV capacity will lead to non-cash impairment and other charges of US$1.2 billion, the automaker said in a regulatory filing, while the rest of the costs relate to cancelling contracts and settling commercial arrangements linked to EV investments.
“GM’s long-term strategy is to build a profitable EV business in North America and in light of evolving market dynamics, GM and our partners will pause the second phase of the project,” which involved increasing production capacity of cathode active material, a GM spokesperson said in an emailed statement. The decision was reported earlier by the Canadian Broadcasting Corp.
The Detroit company’s partner in the Quebec venture is South Korea’s Posco Future M Co. The first phase is on track to begin producing material for EV batteries next year, the spokesperson said.
Vale said in a separate statement that GM’s move means it won’t need nickel sulfate for now. “As a result, Vale Base Metals must terminate its nickel sulfate plant project,” which was expected to cost $325 million.
Becancour, Quebec, has emerged as an electric-vehicle battery hub, but a number of projects have now been delayed, including a more than $1.2 billion cathode plant of the battery-materials maker Ecopro Group. Ford Motor Co. was initially part of that project, but pulled out.
Bloomberg.com
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