Why Is General Motors Exiting Its Indiana Battery Joint Venture?

Despite the ownership change, General Motors and Samsung SDI will maintain a business relationship. The companies have entered into a separate agreement to jointly develop next-generation prismatic battery cells for potential future EV applications, while General Motors will continue to source batteries from Samsung SDI.

The move comes amid weaker-than-expected EV demand in the United States following the expiration of the $7,500 federal EV tax credit in September 2025. Automakers have since reduced EV production and adjusted battery capacity plans. 

General Motors has already incurred roughly $6 billion in charges related to scaling back its EV strategy, while its Ultium Cells joint venture with LG Energy Solution has also faced production slowdowns and workforce adjustments. Against this backdrop, General Motors’ decision to exit the Indiana battery venture allows Samsung SDI to take full control of the facility while reducing General Motors’ direct exposure to battery manufacturing investments. GM carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Automakers are Dealing With Challenges in EV Demand?

In December 2025, Ford Motor Company F and South Korean battery manufacturer SK On announced plans to end their BlueOval SK joint venture. In 2021, Ford and SK Innovation, the parent company of SK On, had announced an $11.4 billion investment to build three battery gigafactories in the United States, including two in Kentucky and one in Tennessee. The initiative was designed to establish a vertically integrated battery supply chain for Ford’s next-generation electric trucks and SUVs. The decision to end the joint venture comes amid concerns over slowing EV demand and a shifting U.S. political landscape following changes to federal EV incentives.

Tesla, Inc. TSLA halted production of its Model S and Model X in May at its Fremont facility amid declining deliveries. It is preparing the facility for the production of Optimus humanoid robots. Tesla is expected to begin Optimus production later this year, creating an entirely new supply chain and manufacturing process for the company. As with any new technology, the production ramp-up is expected to follow a gradual S-curve, with Tesla anticipating that Optimus production will reach significant volumes next year.

GM’s Price Performance, Valuation and Estimates  

General Motors has outperformed the Zacks Automotive-Domestic industry in the last six months. Its shares have gained 10.2% against the industry’s decline of 15.4%. 

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From a valuation perspective, GM appears undervalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.42, lower than the industry’s 3.08. 

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The Zacks Consensus Estimate for GM’s 2026 and 2027 EPS has moved up 2 cents and 8 cents, respectively, in the past seven days. 

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This article originally published on Zacks Investment Research (zacks.com).

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