An architectural rendering of GM's Wallace Battery Cell Innovation Center that will be built in Michigan.
Courtesy of GM EV/AV CommunicationsGeneral Motors is going all-in on electric vehicles. The U.S. auto giant is spending billions on new battery capacity and capacity to assemble new EV models. It’s also spending hundreds of millions on a new research and development center designed to improve battery technology and lower battery costs.
Tuesday, GM (ticker: GM) announced another battery project: the Wallace Battery Cell Innovation Center that will be located on the company’s global technical center in Warren, Mich.
The new center is named after Bill Wallace. He played a “pivotal role in the development of the auto maker’s advanced battery technology and trained many of its current battery leaders,” the company said.
The center should cost millions and employ hundreds of engineers researching and testing better batteries. The new battery center is in addition to the billions being spent on new battery manufacturing capacity in Lordstown, Ohio; Spring Hill, Tenn.; and other locations.
The center will work on advanced battery anodes and electrolytes and “will be capable of building large-format, prototype lithium-metal battery cells for vehicle usage …nearly twice the size of the initial Ultium pouch cells and will be based on GM’s proprietary formula,” said the company.
It’s a technical mouthful but shows that GM is serious about the transition to electric vehicles. It also illustrates some of the ways GM—and the industry—is working to improve batteries. Engineers are fine-tuning technologies and it’s leading to better batteries.
All auto companies are racing to reduce the price of EV batteries. Lower costs means, eventually, sticker price parity with gasoline-powered cars and better batteries can become a competitive advantage for auto makers. GM is targeting a 60% reduction in battery cost over the coming few years.
If that happens, the cost of batteries in a typical GM EV could drop from, say, $15,000 to $6,000. The cost of batteries as a percentage of the price of an EV, in that scenario, would drop to roughly 10%-20% from 20%-30%.
It would help EVs penetrate new car sales faster. Cheaper batteries that are longer lasting, charge faster, and go farther on a single charge are the panacea the industry is after.
“The Wallace Center will significantly ramp up development and production of our next-generation Ultium batteries and our ability to bring next-generation EV batteries to market,” said Doug Parks, GM executive vice president, global product development, purchasing, and supply chain. “The addition of the Wallace Center is a massive expansion of our battery development operations.”
Ultium is the name for GM’s flexible EV architecture and EV battery technology.
The center is under construction and should be completed in mid-2022 with prototype cells available by the end of the year.
Investors are cheering GM’s long-term commitment to EVs, but they are also happy that demand for new cars is strong today.
GM stock is up about 30% year to date, better than the 14% and 11% comparable, respective returns of the S&P 500 and Dow Jones Industrial Average. Strong demand for new vehicles coming out of the Covid-induced recession has pushed up vehicle pricing and improved profits even as a global semiconductor shortage has curtailed global car production.
Its shares were up 0.7% in early Monday trading.
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