Samsung SDI to buy out GM's stake in battery joint venture

General Motors Co. is backing out of a planned $3.5 billion electric vehicle battery plant in Indiana, where construction stalled earlier this year as the automaker and partner Samsung SDI cope with lagging interest in EVs among U.S. drivers.

GM is selling its 50% stake in the New Carlisle, Indiana, plant to Samsung SDI, the South Korean electronics company said Tuesday.

"The ownership change was made in consideration of market changes since the joint venture was announced — including the slower-than-expected growth of EV demand," according to a statement from Samsung. "The two partners have now decided to seek other forms of cooperation other than the joint venture."

"By acquiring the joint venture stake, SAMSUNG SDI establishes its first independently operated battery production base in North America, with plans to utilize the plant for producing high-tech batteries for use in various applications."

Samsung SDI said in a regulatory filing that it plans to use the wholly owned unit — SDI-GM Synergy Cells Holdings — to respond to market demand for batteries across various applications, including energy storage systems and EVs, Reuters reported.

The company said its existing investment plan would change following the shift to a wholly owned unit, but specific investment plans had not yet been finalized. The company said it would make further disclosures in accordance with regulatory requirements.

A GM spokesperson did not immediately respond to a Detroit News request for comment on the sale Tuesday.

The News in October first reported construction delays and layoffs at the 680-acre site, which is just south of the Michigan border and west of South Bend.

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The plant was slated to make nickel-rich prismatic batteries for use in EVs, but the project has been repeatedly delayed amid slowing consumer demand and EV policy reversals by the Trump administration and Republican-controlled Congress.

Construction on the battery plant was paused again in May.

Samsung SDI on Tuesday also announced an agreement with GM to co-develop next-generation prismatic batteries for future use in EVs. Prismatic batteries are high-energy density and charge quickly.

The partnership aligns with what GM executives have said about the company's long-term EV plans.

More: GM's EV quandary: It's ahead of most rivals but risks outrunning the market

While GM is paring back EV manufacturing to align with current lukewarm demand in the United States and save on the money-losing models now that the Trump administration is no longer enforcing tailpipe emission standards, the company is investing in battery research to lower costs once the vehicles eventually rise in popularity.