DETROIT – Normal Motors plans to kind a brand new three way partnership with a South Korean chemical firm to supply the important supplies wanted for EV batteries — a major transfer to regulate its provide chain and reduce the possibilities of disruptions sooner or later.

The Detroit automaker on Wednesday mentioned it signed a non-binding time period sheet with Posco Chemical to create the three way partnership and expects to execute definitive agreements quickly.

Shares of GM had been up by 4% throughout Wednesday morning buying and selling to about $60.30 a share.

The businesses plan to open a brand new facility in North America in 2024. GM mentioned the plant will course of important battery supplies referred to as Cathode Energetic Materials, or CAM, for GM’s electrical automobiles.

CAM symbolize about 40% of the price of a battery cell, the automaker mentioned. GM’s new batteries use cathodes made from nickel, cobalt and different supplies.

GM and different automakers are scrambling to combine and onshore provide chains for electrical car batteries to cut back prices and decrease dangers of provide chain disruptions.

The Biden administration additionally has urged corporations to deliver work to the U.S. following an ongoing international scarcity of semiconductor chips – primarily provided from Asia – inflicting huge shutdowns of factories.  

The automaker declined to launch particular particulars similar to value or the placement of the deliberate facility, which is able to provide the supplies to introduced battery vegetation for GM in North America, forward of the definitive settlement being signed.

“That is going to be fairly vital funding for each GM and Posco,” Doug L. Parks, govt vp of worldwide product growth, buying and provide chain, advised media throughout a name Wednesday.