GM brings in partners to build up North American EV supply chain
To reach $90 billion in electric vehicle revenue by 2030, General Motors Co. is continuing to grow a North American-focused supply chain for its coming EVs and on Thursday revealed two new partners in that mission.
First, GM has formed a supply partnership for rare earth materials, alloy and finished magnets for electric motors from MP Materials, owner and operator of the Mountain Pass Rare Earth Mine and Processing Facility, which is claimed to be "the only rare earth mining and processing site of scale in North America." There's no capital investment from GM involved in this supply partnership.
Second, GM and Vacuumschmelze or VAC, a global producer of advanced magnetic materials, are finalizing the details of a deal for VAC to build a U.S. facility that will manufacture permanent magnets for electric motors in GM's EVs built on GM's new Ultium electric platform.
The Detroit automaker, which plans to have 30 EVs launched globally by 2025, wants to drive down the cost of EV production and vehicle prices by further developing the North American supply chain for the materials needed to build EVs.
"Our intent is we will have a fully resilient, sustainable, scalable and cost-competitive supply chain for the entire value chain through a North America-focused supply chain to support all of our EV production in North America," said Shilpan Amin, vice president of global product development, purchasing and supply chain. "We will continue on that strategy."
Last week, GM said it's planning to form a joint venture with South Korean company Posco Chemical for a new North American processing facility for key materials needed for electric vehicle batteries.
GM has also formed a joint venture with battery supplier LG Energy Solution for battery cell manufacturing plants. The companies plan to build four U.S. sites with the first one in northeast Ohio slated to come online early next year.
GM and MP Materials signed a binding agreement on terms and should enter into a definitive supply agreement shortly. MP announced Thursday it's building a production facility in Fort Worth, Texas, that will source materials from its Mountain Pass, California, facility and transform them into metal, NdFeB alloy and magnets. The facility will produce magnets that could power about 500,000 EV motors per year. A gradual production ramp should begin in 2023.
The companies plan to work on public policy together for policies that support the creation of a "secure, U.S. rare earth supply chain," GM said.
GM and VAC have signed a non-binding memorandum of understanding. The two expect to finalize agreements in early 2022.
The VAC plant is slated to start production in 2024. A location for that plant will be announced at a later date, GM said. Finished magnets made at the VAC plant for GM's EV motors will be delivered to facilities producing these motors. The locations of those also haven't been revealed.
"We think it's important to secure that supply chain based in North America," said Doug Parks, GM executive vice president of global product development, purchasing and supply chain, during a virtual chat with Deutsche Bank. "Currently, some of those parts and pieces go through other parts of the world. And that's OK, but we think to really build to our high volume and get a stable, cost-effective footprint that's going to be North America."