GM EV Supply Chain Pivot, $7.6 B Writedown, $625 M Lithium Americas Deal, and 2 Paused Projects (2021 to 2026)

GM EV Supply Chain Risk: From Aggressive Expansion to Pragmatic Localization

General Motors executed a fundamental strategic pivot in its electric vehicle supply chain between 2025 and 2026, moving from a capacity-at-all-costs expansion model to a pragmatic approach focused on North American localization, cost reduction, and profitability. The period between 2021 and 2024 was defined by ambitious production targets and building out a global supply network for its Ultium battery platform. However, this strategy proved untenable against slower-than-expected consumer demand and the extreme geopolitical risk of a supply chain heavily reliant on China, forcing a necessary and costly course correction.

• Between 2021 and 2024, GM focused on scaling its Ultium platform, announcing multiple battery joint ventures and targeting production of 1 million EVs in North America by the end of 2025. This strategy relied on a complex global network for critical minerals and components.
• Beginning in late 2024 and intensifying through 2026, the strategy shifted dramatically. The company incurred approximately $7.6 billion in EV-related charges and writedowns from canceling supplier contracts and recalibrating production, reflecting the high cost of its prior strategy (GM Reworks EV Production and Supply Chain After $7.6 B Hit).
• This pivot was explicitly aimed at de-risking the supply chain, with GM mandating its suppliers to phase out sourcing from China by 2027 to comply with Inflation Reduction Act (IRA) requirements and reduce geopolitical exposure (China’s Grip on Supply Chains and General Motors 2027 …). The current global market for electric vehicles shows the difficulty of this decoupling.

$7.6 B in Writedowns, General Motors Restructures EV Investments

General Motors‘ financial actions since late 2024 reveal a clear pattern of redirecting capital from downstream battery cell manufacturing capacity toward upstream control of raw materials while canceling projects that no longer align with market realities. The company is absorbing significant short-term financial pain to fund a long-term, vertically integrated North American supply chain. This involves major investments in domestic mining and processing, offset by delays and cancellations of previously announced battery plants.

• The most significant new investment is the $625 million commitment to co-develop the Thacker Pass lithium mine in Nevada with Lithium Americas, securing a domestic lithium source critical for IRA compliance.
• In contrast, GM has delayed its fourth US battery plant in Indiana to 2027 and, with partner Posco Future M, paused the second phase of a cathode active materials (CAM) factory in Quebec.
• These moves are a direct response to slowing near-term EV demand and an acknowledgment that building a secure, domestic supply chain is a more pressing strategic priority than simply adding more battery assembly capacity.

Table: General Motors Key EV Supply Chain Investments and Cancellations (2024-2026)

US Industrial Reshoring Surges with $300B+ Investments
The US has attracted over $320 billion in new industrial investments, primarily driven by strategic reshoring initiatives. Semiconductor Fabs lead with $183.5B, followed by Battery Factories ($53B) and Auto/EV Plants ($26.2B), underscoring a robust national commitment to domestic supply chain resilience across critical technologies.

De-Risking EV & Tech Supply Chains, Boosting Competitiveness
This investment surge directly de-risks the EV supply chain, reducing reliance on foreign sources for batteries, critical components, and advanced manufacturing. For companies like GM, it ensures a stable, localized supply of essential inputs, accelerating their EV transition and enhancing overall U.S. industrial independence in crucial tech sectors.

Global Battery Demand to Explode 10X by 2025, Fueled by Passenger EVs
Global battery demand is projected to surge ten-fold from ~150 GWh in 2019 to over 1400 GWh by 2025, driven primarily by passenger EVs which constitute over 70% of this demand. This exponential growth highlights an immense, near-term requirement for battery capacity.

(Source: The IRA and the US Battery Supply Chain: One Year On – Center on Global Energy Policy at Columbia University SIPA | CGEP)

GM Alliances for Materials and Technology, a Two-Track Strategy

General Motors is pursuing a dual-track partnership strategy, securing current-generation battery materials from non-Chinese sources while simultaneously collaborating on next-generation technologies to drive down costs. Pre-2025 alliances were almost entirely focused on scaling Ultium (NMC) battery production. Post-2025 partnerships show a clear diversification into alternative chemistries like LFP and sodium-ion, and a deeper push into the upstream value chain for raw materials like graphite and manganese.

• To secure its anode supply chain, GM signed a multi-billion-dollar deal with Norway’s Vianode in January 2025 for synthetic graphite, a direct move to find alternatives to Chinese suppliers who dominate the market.
• To bridge the gap to domestic LFP production, GM established a supply agreement in August 2025 to import LFP cells from China’s CATL, a pragmatic step to introduce lower-cost batteries into its lineup quickly.
• Looking further ahead, GM partnered with Peak Energy in June 2026 to scale sodium-ion battery technology, aiming for a 20% cost reduction in energy storage, a hedge against lithium price volatility.
• A long-standing partnership with LG Energy Solution was refocused in May 2025 to pioneer Lithium Manganese-Rich (LMR) cell technology, which promises higher energy density than LFP without the high cost of cobalt.

Table: General Motors Strategic EV Supply Chain Partnerships (2025-2026)

US and Canada, General Motors’ North American Supply Chain Focus

General Motors‘ geographic focus has decisively shifted to building a self-contained North American supply chain, a direct response to IRA incentives and the geopolitical imperative to reduce dependence on Asia, particularly China. While the pre-2025 strategy involved a global sourcing network, all major strategic announcements since have centered on investments within the United States and Canada. This regional consolidation is the defining feature of GM‘s industrial strategy through 2026.

• The United States is the epicenter of this activity, anchored by the $625 million investment in the Thacker Pass lithium mine in Nevada. This move, combined with planned LFP production and manganese processing, is designed to create a mine-to-megapack ecosystem within the US.
• Canada remains a key partner, particularly for mid-stream processing, despite the pause of the Posco CAM plant’s second phase. The initial phase of the Quebec facility and partnerships with companies like Vale (before its project cancellation) show a strategy to leverage Canada’s resource wealth and processing expertise.
• The explicit directive for suppliers to exit China by 2027 is the clearest signal of this geographic pivot. This forces a complete re-mapping of supply chains for dozens of components beyond just battery cells and minerals.

China Dominates Critical EV Battery Supply Chain Segments
China commands an overwhelming share of the global EV battery supply chain in 2024, dominating material processing (e.g., >80% for Li, Mn, Ph, Gr), cell components (e.g., LFP, NMC, Anode >80%), and battery cell manufacturing (>75%). This extensive control highlights a profound global dependency on China across midstream and downstream segments.

US Reshoring Faces Uphill Battle in Key Battery Manufacturing Stages
The United States’ minimal presence across material processing and cell component manufacturing (<10% in many key areas) creates a critical vulnerability. GM's 2026 reshoring targets and broader American industrial strategy will face significant challenges without massive investment to build out domestic refining and cell production capabilities, reducing reliance on current foreign strongholds.

China Dominates Critical Rare Earth Demand for EV Magnets
By 2024, China accounts for over 50% of regional demand for critical rare earth elements like Dysprosium, Terbium, Gadolinium, and Samarium. These elements are predominantly used in magnets (often >70% for Dysprosium, Terbium), which are essential for EV motors, highlighting a significant supply chain vulnerability.

(Source: How Critical Mineral Supply Chains Became the EV Industry’s Achilles Heel)

GM’s EV Battery Tech: From Ultium Scaling to Next-Gen Cost Reduction

General Motors‘ battery technology strategy has evolved from singular-focus scaling to a multi-chemistry approach aimed at lowering costs and hedging against raw material volatility. The initial phase (2021-2024) was dedicated to the commercialization and production ramp-up of its nickel-manganese-cobalt (NMC) Ultium platform. The current phase (2025-2026) is characterized by the adoption of more affordable LFP chemistry as a near-term solution and aggressive R&D into next-generation LMR and sodium-ion technologies for long-term leadership.

• The decision to import LFP batteries from CATL while planning for domestic LFP production with partners like LG and Samsung SDI marks a significant technological pivot. It acknowledges that NMC chemistry alone cannot meet the cost targets for mass-market EVs.
• Redesigning battery packs to use prismatic cells is a critical engineering shift. This is projected to reduce pack components by 50% and module components by 75%, potentially cutting costs by up to $6, 000 per vehicle (GM expands EV battery production to lower costs).
• The active pursuit of LMR chemistry with LG and sodium-ion with Peak Energy demonstrates that GM views technological innovation as the primary lever for future profitability. LMR is targeted for a 2028 launch, promising improved energy density over LFP, while sodium-ion offers a path away from lithium dependency for certain applications. This is similar to efforts by rivals like Toyota.

Scenario Modelling: GM’s 2026 Execution Risk and IRA Deadlines

By 2026, General Motors‘ success will be determined by its ability to execute its complex supply chain reshoring strategy against tight deadlines and market uncertainty. The strategy itself is sound, but its operationalization is fraught with risk. If GM can bring its new domestic mineral and processing facilities online on schedule, it will build a significant competitive moat; if it falters, it risks falling behind competitors and failing to secure full IRA tax credits.

• If permitting and development of the Thacker Pass lithium mine proceed without major delays, watch for GM to secure a critical cost and supply advantage for IRA-compliant batteries starting in 2027. Any significant legal or regulatory setback would be a major blow.
• If progress on the Indiana battery plant and domestic LFP production with LG and Samsung accelerates, watch for GM to launch a new wave of more affordable EVs. This would signal that its cost-reduction strategy is on track.
• If commercial validation of LMR and sodium-ion battery prototypes shows promise, these could be happening: accelerated pilot production programs and new offtake agreements for manganese and other required materials. This would indicate GM is successfully building its next-generation technology pipeline.

The questions your competitors are already asking

This report covers one angle of GM’s EV supply chain restructuring. The questions that matter most depend on your work.

• Ford EV battery supply chain strategy
• New lithium mines in North America
• US electric vehicle sales forecast problems
• Graphite and manganese suppliers outside China

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