Olivia Cavallaro Tech 09.01.2022 02:Sep AM EDT

GM, LG Energy Owned EV Battery Factory in Ohio Begins Production of Cells

General Motors announced this week that its new Ohio-based EV battery plant has begun production of cells.

A joint-venture EV battery plant build near Warren, Ohio by General Motors and LG Energy Solution has now begun producing cells this week. The EV battery factory is now focused on training in preparation of full force manufacturing.

According to ABC News, a spokesman for the GM and LG Energy venture said that the EV battery factory in Ohio is now producing cells but are not yet being shipped or distributed. Instead, these produced batteries will go to EVs that are powered by GM's Ultium batteries, including the Hummer EVs, Chevrolet Silverado EV pickups and the Cadillac Lyriq electric SUV.

GM and LG Energy believe that the EV battery factory in Ohio will be able to help the car manufacturer to qualify for a federal tax credit of up to $7,500 per vehicle.

Car Manufacturers Can Qualify For Tax Credits Under Certain Conditions.

Some companies will be qualified for tax credits under the Inflation Reduction Act, which was established "to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40% by 2030." The bill was also passed to invest over $60 billion to create millions of new domestic clean manufacturing jobs.

The Inflation Reduction Act requires that companies manufacture electric vehicles or EVs and its batteries in North America to be able to get the tax credit. The bill also requires that minerals used in the production of EV batteries must be mined or recycled in the same region as well, or suffer a loss of half the tax credit. Lastly, the batteries must not have any components from China, a specific challenge for many EV battery manufacturers. The ultimate goal was to create a supply chain for EVs that remains within North America so that it is no longer reliant on China.

GM Working to Qualify for Tax Credits to Remain Competitive in EV Market

GM announced that it is now working to meet the requirements of the Inflation Reduction Act with the belief that no carmaker would want to release an EV that is $7,500 more expensive than its competitor. Establishing the EV battery factory in Ohio is just one of the first steps in doing so.

The plant called Ultium Cells LLC cost $2.3 billion and spans 2.8 million square feet. It is the first of at least four plants planned by the two companies in America, Reuters reported. The EV battery factory in Ohio was first announced in 2019 and now has over 800 employees preparing to ramp up production of EV batteries. The company said they are hoping to have 1,300 employees when it reaches full capacity next year.

On Wednesday, Ohio Governor Mike DeWine toured Ultium Cells LLC after urging Honda and LG Energy to establish a location for a planned $4.4 billion battery plant in the state. A few weeks ago, GM and LG Energy said they were looking to build another battery cell manufacturing plant in New Carlisle, Indiana, which has a price tag of $2.4 billion. The two companies also announced a $2.6 billion investment for a new EV battery factory in Lansing Michigan and a $2.3 billion facility in Spring Hill, Tennessee.