Samsung SDI Co. and automaker General Motors Co. will invest over $3 billion to jointly build a battery plant in the U.S., according to an announcement from the companies on Tuesday.

The plant will have an annual capacity of more than 30 gigawatt hour when it starts operations in 2026, Samsung SDI said in a regulatory filing. It will be bigger than the $2.6 billion the U.S. carmaker is spending on its third battery plant in Michigan together with LG Energy Solution Ltd. Further details concerning the location of the new plant were not announced.

Earlier on March 8, Samsung SDI Chief Executive Officer Choi Yoon-ho visited GM headquarters in Michigan and met with GM CEO Mary Barra to sign a memorandum of understanding on the joint battery plant. The MOU reportedly states that Samsung SDI will supply GM with prismatic and cylindrical batteries. Up until now, GM has used only pouch batteries provided by LG Energy Solutions, but based on its partnership with Samsung SDI, GM seems to be seeking some diversification in its battery supply to reduce reliance on a single battery maker.

Indiana is said to be the most likely location for the joint Samsung-GM plant. In August, GM said it was considering New Carlisle, Indiana for the site of its fourth joint plant with LG Energy Solution, but in January GM dropped the plan, according to media reports, raising the possibility of Indiana being the location for another joint project.

Samsung SDI is expected to expand its presence in the U.S. market based on its partnership with GM. The venture with GM will be Korean company’s second U.S. production base, after its joint project with Stellantis N.V. In May last year, Samsung SDI announced that it would invest more than $2.5 billion with Stellantis to build a battery plant in Kokomo, Indiana, which will begin operations in the first quarter of 2025.

Samsung SDI plans to respond to the recently introduced U.S. Inflation Reduction Act with new U.S. production facilities. The company has previously had more European customers in its portfolio, such as BMW AG and Volkswagen AG, based on its plant in Hungary.

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