Elon Musk, Chief Executive Officer (CEO) of Tesla, announced that he would focus on his main business, causing not only Tesla's stock price but also stocks related to South Korean battery companies to rise sharply. However, General Motors (GM), an American automaker, has continuously hinted at changes in its electric vehicle transition strategy, which is expected to have a negative impact on the South Korean battery industry in the future.
On the 24th (local time), Musk posted on X (formerly Twitter), "I have returned to the time when I worked 24 hours a day and slept in meeting rooms and factories. I need to focus tremendously on X and Tesla." Since mid-last year, Musk has been campaigning for Donald Trump’s presidential election, and after Trump's victory, he served as the head of the Department of Government Efficiency (DOGE), working primarily in Washington.
While Musk focused on politics, Tesla's performance deteriorated sharply. According to the European Automobile Manufacturers Association, Tesla sold only 7,261 vehicles in Europe last month, a 49% decrease compared to the same period last year.
After Musk announced he would concentrate on management, the stock prices of South Korean battery companies such as Tesla, Samsung SDI, LG Energy Solution, POSCO FUTURE M, LOTTE Energy Materials, and L&F rose significantly. This was influenced by expectations that innovative electric vehicles would emerge and demand for electric vehicles would increase.
In contrast, GM's shift in its electric vehicle strategy is a negative factor for the battery industry. The Wall Street Journal (WSJ) recently reported, "GM is expected to invest $888 million in producing V8 engines instead of proceeding with plans to invest $300 million in electric vehicle motor production at its Tonawanda plant in Buffalo, New York." After finding that electric vehicle demand is weaker than expected, GM is likely to focus on profitably producing trucks and sports utility vehicles (SUVs).
GM is moving toward a transition from electric vehicles to hybrid and internal combustion engine vehicles. GM President Mark Reuss said last August, "The electric vehicle market is not growing as quickly as initially expected. We are re-evaluating our electric vehicle strategy."
GM's change in its electric vehicle strategy could affect LG Energy Solution, Samsung SDI, and POSCO FUTURE M, which have established or are operating electric vehicle battery joint ventures. LG Energy Solution has established a company called Ultium Cells with GM and is operating two factories in the U.S. Samsung SDI is also building a battery factory in Indiana in partnership with GM. POSCO FUTURE M is constructing a cathode material factory in Canada with a joint venture called Ultium CAM with GM.
GM has decided to transfer its stake in the Ultium Cells third factory it was building with LG Energy Solution to LG Energy Solution, with the acquisition confirmed on the 8th. The mass production date of the battery factory built by Samsung SDI and GM in Indiana has been revised to 2027, one year later than the original plan.
GM has also indicated the possibility of collaborating with Chinese companies on electric vehicle batteries. Kurt Kelly, Vice President of GM's battery division, stated during a conference call on the 23rd, "We are not ruling out the possibility of collaborating with a Chinese partner." This suggests a shift toward introducing lithium iron phosphate (LFP) batteries, which are led by Chinese companies rather than the nickel-cobalt-manganese (NCM) batteries where South Korean companies have an advantage.
LG Energy Solution and Samsung SDI are reportedly reviewing plans to convert some of their U.S. factories to LFP battery production lines at GM's request. A battery industry official noted, "In the U.S., there is a tendency to prioritize price over performance when choosing electric vehicles, so I understand GM is showing interest in adopting LFP batteries."