In a strategic move poised to reshape the landscape of electric vehicle (EV) battery production, General Motors (GM) and LG Energy Solution have announced a $3.5 billion investment to produce lithium-manganese-rich (LMR) battery cells at their joint venture plants in Ohio and Tennessee. Scheduled to begin operations by 2028, this initiative is expected to significantly reduce battery costs while enhancing performance metrics such as energy density and thermal stability. More importantly, it presents a significant opportunity for U.S.-based electrical component manufacturers who supply sub-components like bus bars, connectors, and weldments—integral parts of EV battery systems.
This article explores the implications of GM and LG’s investment, focusing on how U.S. contract manufacturers can capitalize on the growing demand for these critical components in the evolving EV supply chain.
The Rise of LMR Battery Technology
Lithium-manganese-rich (LMR) battery technology represents a promising evolution in the pursuit of higher-performing, more cost-effective EV batteries. Unlike traditional lithium-ion chemistries that rely heavily on nickel and cobalt—materials that are both expensive and ethically contentious—LMR cells leverage a higher proportion of manganese, which is abundant, less costly, and safer in terms of thermal runaway risks.
According to Reuters (2025), GM and LG Energy Solution aim to produce LMR cells that offer improved energy density compared to current offerings, potentially increasing driving range without adding weight or volume to the battery pack. This advancement aligns with broader industry trends toward optimizing EV efficiency and affordability.
Moreover, LMR chemistry supports faster charging capabilities and exhibits better structural stability under high-temperature conditions—a crucial factor in ensuring long-term reliability and safety in EV applications. These benefits position LMR as a strong contender in the next generation of EV battery technologies.
Strategic Investment in Domestic Manufacturing
The $3.5 billion investment by GM and LG underscores a commitment to domestic manufacturing amid rising geopolitical concerns over supply chain security and economic resilience. The new LMR cell production will take place at the company’s Ultium battery plants in Lordstown, Ohio, and Spring Hill, Tennessee. These facilities were previously part of the Ultium Cells joint venture, established in 2019 to produce lithium-ion battery cells for GM’s future EV lineup.
By expanding their partnership to include LMR technology, GM and LG are not only doubling down on the U.S. market but also signaling confidence in the long-term viability of advanced battery chemistry produced domestically. This decision is further reinforced by federal incentives such as the Inflation Reduction Act (IRA), which offers tax credits for EVs assembled in North America using locally sourced materials and components.
As reported by Reuters, the first commercial application of LMR cells is expected to be in GM’s upcoming electric vehicles slated for release later this decade. This timeline provides a clear roadmap for suppliers and subcontractors to prepare for increased demand across the battery ecosystem.
Supply Chain Implications: Opportunities for U.S. Electrical Component Makers
The shift toward LMR battery production creates a ripple effect throughout the EV supply chain, particularly benefiting specialized contract manufacturers involved in producing sub-components such as:
- Bus Bars: Conductive strips used to distribute electrical power within the battery module.
- Connectors: Critical interfaces that ensure reliable connections between battery cells and modules.
- Weldments: Structural components formed through welding processes, often used in battery trays, frames, and casings.
These components, though relatively small in scale, play a vital role in ensuring the integrity, performance, and safety of EV battery packs. With the ramp-up of LMR cell production, OEMs and Tier 1 suppliers will require an expanded network of qualified vendors capable of meeting quality, scalability, and just-in-time delivery standards.
U.S. electrical component makers stand to gain from several competitive advantages:
- Proximity to Production Hubs: Companies located near Ohio and Tennessee can benefit from reduced logistics costs and shorter lead times.
- Quality Assurance and Traceability: Domestic sourcing aligns with automakers’ priorities for transparency and compliance in the wake of global supply chain disruptions.
- Support from Government Incentives: Federal and state-level programs aimed at revitalizing U.S. manufacturing provide additional financial support for local suppliers.
Industry analysts suggest that the demand for battery-related components could grow by double digits annually over the next decade, driven by the expansion of EV production capacity across North America. For electrical component manufacturers, this represents a once-in-a-generation opportunity to integrate into a high-growth sector.
Challenges and Considerations for Suppliers
While the outlook is promising, U.S. electrical component makers must navigate several challenges to fully capture the opportunities presented by GM and LG’s LMR investment:
- Technical Expertise and Certification: Meeting automotive-grade quality standards requires adherence to stringent certifications such as IATF 16949 and ISO 9001. Suppliers must invest in process control, material testing, and workforce training to ensure compliance.
- Scalability and Capital Investment: Scaling up production to meet anticipated volumes may require significant capital outlays for automation, tooling, and facility expansion. Access to financing and government grants becomes essential for smaller manufacturers.
- Competition from Global Suppliers: Despite the push for localization, international suppliers remain active in the U.S. market, often offering lower-cost alternatives. Domestic firms must differentiate themselves through speed, innovation, and customer service.
- Technological Evolution: As battery chemistry continues to evolve, suppliers must remain agile and adaptable. Investing in R&D partnerships with universities or research institutions can help maintain a competitive edge.
- Environmental and Sustainability Requirements: Automakers are increasingly focused on reducing carbon footprints across their supply chains. Electrical component manufacturers must adopt sustainable practices, including energy-efficient production and recycling initiatives.
Case Studies: Success Stories in the EV Supply Chain
Several U.S. companies have already demonstrated success in integrating into the EV battery supply chain, offering valuable insights for others looking to follow suit.
- Amphenol Corporation (NYSE: APH): A leading manufacturer of interconnect products, Amphenol has expanded its portfolio to include high-voltage connectors and cable assemblies tailored for EV battery applications. Its focus on miniaturization, durability, and thermal management has positioned it as a key supplier to major automakers.
- Methode Electronics, Inc. (NYSE: MEI): Methode supplies power distribution systems and sensor solutions for EVs. Its expertise in battery monitoring systems has enabled it to secure contracts with multiple EV platforms, including those utilizing advanced chemistries like LMR.
- Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC): While primarily known for semiconductor equipment, Kulicke & Soffa has developed wire bonding solutions for EV battery modules, addressing the need for high-reliability interconnects in harsh environments.
These examples illustrate how specialization, innovation, and vertical integration can create value in the rapidly evolving EV ecosystem.
Policy and Industry Support: Enabling Supplier Growth
To facilitate the growth of U.S. electrical component manufacturers, both policymakers and industry stakeholders are playing pivotal roles.
At the federal level, the Department of Commerce and the Department of Energy have launched initiatives aimed at strengthening the domestic battery supply chain. Programs such as the Battery Materials Processing and Battery Manufacturing Grants, funded under the Bipartisan Infrastructure Law, offer financial assistance to companies investing in advanced manufacturing capabilities.
State governments are also stepping in. Ohio and Tennessee, where GM and LG’s new LMR plants will operate, have implemented targeted economic development strategies to attract and retain battery-related businesses. These include tax incentives, workforce development grants, and infrastructure investments to support industrial parks and logistics hubs.
Industry consortia such as the United States Advanced Battery Consortium (USABC) and the Battery Innovation Center (BIC) provide platforms for collaboration between manufacturers, researchers, and investors. These organizations foster knowledge sharing, standardization efforts, and early-stage technology development—all critical for scaling up production efficiently.
Conclusion: A New Era for U.S. Electrical Component Makers
General Motors and LG Energy Solution’s $3.5 billion bet on lithium-manganese-rich battery cells marks a significant milestone in the transition toward affordable, high-performance electric vehicles. Beyond its technological merits, this investment opens a gateway of opportunity for U.S. electrical component manufacturers willing to innovate, adapt, and scale.
As the EV industry continues to mature, the demand for precision-engineered sub-components will only intensify. Companies that position themselves strategically—by securing certifications, investing in automation, and building robust supply chain relationships—stand to reap substantial rewards.
For policymakers and economic developers, supporting these manufacturers through targeted incentives and infrastructure development is not just an economic imperative but a national one. Strengthening the domestic EV supply chain enhances energy security, fosters job creation, and positions the United States as a leader in the clean transportation revolution.
The road ahead is challenging, but the potential payoff is immense. As GM and LG pave the way with their LMR battery initiative, U.S. electrical component makers have a unique chance to drive the future of mobility—one connector, bus bar, and weldment at a time.
Works Cited
Reuters. “GM, LG Make New Lower-Cost Cells for Future EVs.” Reuters, 13 May 2025, www.reuters.com/business/energy/gm-lg-make-new-lower-cost-cells-future-evs-2025-05-13/?utm_source=chatgpt.com.
United States Department of Energy. “Battery Materials Processing and Battery Manufacturing Grants.” Energy.gov, www.energy.gov/energyservices/battery-materials-processing-and-battery-manufacturing-grants.
United States Advanced Battery Consortium. “About USABC.” USABC.org, https://americanbatterytechnology.com/projects/usabc-project/
Battery Innovation Center. “Collaboration Drives Innovation.” BatteryInnovationCenter.org, www.batteryrnnovationcenter.org.
Amphenol Corporation. “Solutions for Electrification.” Amphenol.com, www.amphenol.com/solutions-for-electrification.
Methode Electronics, Inc.. “Automotive Segment Overview.” Methode.com, investor.methode.com/automotive-segment-overview.
Kulicke & Soffa Industries, Inc. “EV Power Solutions.” KulickeSoffa.com, www.kulicke-soffa.com/ev-power-solutions.
Federal Reserve Bank of St. Louis. “U.S. Electric Vehicle Market Outlook.” Research.stlouisfed.org , 2024.
Department of Commerce. “Strengthening American Manufacturing.” Commerce.gov, www.commerce.gov/strengthening-american-manufacturing.
Ohio Development Services Agency. “Battery Manufacturing Incentives.” Development.Ohio.gov , www.development.ohio.gov/battery-manufacturing .
Tennessee Department of Economic and Community Development. “Advanced Manufacturing in Tennessee.” TNecd.com, www.tnecd.com/advanced-manufacturing.
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