South Korean battery maker Samsung SDI said on Tuesday it will end its joint venture with General Motors in Indiana and acquire the U.S. automaker’s 49.99% stake, as weaker-than-expected electric vehicle demand forces the partners to rethink a project that was originally designed to supply batteries for a rapidly expanding EV market.
Samsung SDI said it will take full ownership of SDI-GM Synergy Cells Holdings and use the unit to respond more flexibly to demand for batteries used in electric vehicles and energy storage systems.
The change gives Samsung SDI greater control over the Indiana operation at a time when the U.S. battery market is undergoing a significant shift. Automakers have scaled back or delayed some EV production plans as consumer demand has grown more slowly than manufacturers had expected, leaving battery companies facing the risk of excess capacity.
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“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,” Samsung SDI said in a statement. The companies will now seek “other forms of cooperation” outside the joint venture, it said.
The venture was announced two years ago and was initially expected to have annual battery production capacity of 27 gigawatt-hours, with mass production scheduled to begin in 2027.
The decision to abandon the joint ownership structure comes before that target is reached, underscoring how sharply expectations for the U.S. EV market have changed since the project was announced. Construction at the Indiana plant had already slowed amid weaker EV demand. GM and other automakers have reduced factory output and reassessed EV investments as sales growth has failed to match earlier forecasts.
The withdrawal also highlights a broader challenge for battery manufacturers. Companies expanded production capacity aggressively on expectations that the transition from gasoline-powered vehicles to EVs would accelerate rapidly. As that transition has progressed more slowly, manufacturers have increasingly looked for alternative applications for battery plants and technologies.
Energy storage is emerging as one of those alternatives.
Samsung SDI said its newly wholly owned U.S. unit will be able to serve both the EV and energy storage markets. That flexibility could become valuable as electricity demand rises from data centers, artificial intelligence infrastructure and industrial activity, while utilities and renewable-energy developers seek more battery storage capacity to stabilize power supplies.
The shift mirrors moves by other manufacturers. In March, GM and LG Energy Solution agreed to convert another battery plant in Tennessee from EV battery production to energy storage systems. That decision showed how facilities originally built around expected EV growth can be repurposed when market conditions change.
For Samsung SDI, the Indiana plant therefore represents more than an EV battery project. Full ownership could allow the company to determine how much capacity should be directed toward electric vehicles and how much could eventually be allocated to energy storage, depending on market demand.
The company said its existing investment plan will change as a result of the ownership restructuring, although specific investment and production plans have not yet been finalized. Samsung SDI said it would provide further disclosures as required.
The two companies are also maintaining cooperation on battery technology. Separately, Samsung SDI said it has signed an agreement with GM to jointly develop next-generation prismatic batteries for potential future EV applications.
That arrangement allows the companies to preserve a technological relationship even as they abandon the original joint-venture structure. Prismatic batteries, which use a rigid rectangular casing, are one of several battery formats being developed for next-generation electric vehicles.
GM’s decision to exit the joint venture also reveals the broader pressure on U.S. automakers to align EV investment with actual consumer demand. The expiration of the $7,500 federal EV tax credit last September further weakened the economics of some electric vehicles and contributed to manufacturers scaling back production.
GM has continued to invest in EVs, but the company and other automakers have been emphasizing flexibility in production and capital allocation rather than maintaining earlier aggressive expansion schedules.
For Samsung SDI, the challenge is to avoid allowing a slower EV market to leave newly built battery capacity underutilized. Redirecting some production toward energy storage could provide another source of demand and reduce its dependence on automakers’ EV production schedules.
The development also points to a broader recalibration across the global battery industry. The long-term transition toward electrification remains intact, but battery suppliers are increasingly being forced to distinguish between long-term demand expectations and the pace at which that demand is materializing.
While Samsung SDI’s move to take full control of the Indiana venture could consequently give it greater strategic flexibility, some analysts believe it also places more of the project’s financial and operational risk on the Korean battery maker.
The companies did not disclose the value of Samsung SDI’s acquisition of GM’s stake. Samsung SDI said further details would be disclosed in accordance with regulatory requirements.
The restructuring means the original plan for a jointly owned 27-GWh EV battery plant is being replaced by a more flexible model in which Samsung SDI controls the asset while continuing to work with GM on future battery technologies.