GM sells stake in Michigan battery plant to JV partner LG Energy Solution

General Motors (NYSE:GM) is unloading its stakes in an electric-vehicle battery plant in Michigan to its Korean partner LG Energy Solution.

The sale will enable GM (GM) to recoup its investment in the facility and underscores the automaker’s pivot regarding EV production and desire to increase its capital efficiency.

The decision to sell its stake also comes in the wake of President-elect Trump’s plan to eliminate the $7,500 tax credit for EV purchases.

“We believe we have the right cell and manufacturing capabilities in place to grow with the EV market in a capital efficient manner. When completed, this transaction will also help LG Energy Solution meet demand by leveraging capacity that’s nearly ready to come online, and it will make GM even more efficient,” said GM CFO Paul Jacobson.

The transaction in the Lansing, Michigan facility will not change GM’s ownership interest in Ultium Cells LLC as the company remains co-owners with LG Energy of EV battery plants in Warren, Ohio and Spring Hill, Tennessee.

In connection with the sale, GM (GM) and LG Energy Solution announced an extension to their 14-year battery technology partnership to include prismatic cell development.

Prismatic cells feature a flat, rectangular shape which allows for space-efficient packaging within battery modules and packs, reducing EV weight. Cells are more difficult to cool while fast charging, however, and can be costlier than cylindrical and pouch cells. BMW and Volkswagen (OTCPK:VWAGY), use prismatic cells for their EVs, while Tesla (TSLA) uses the cheaper and more efficient cylindrical cells.

GM (GM) will use the prismatic and pouch battery cells made in the Ohio and Tennessee facilities for its EV production.