SEOUL/WASHINGTON - South Korea's Samsung SDI said on Wednesday it has completed an agreement with General Motors to build a joint electric vehicle (EV) battery factory in the U.S. state of Indiana.

The two companies will invest about $3.5 billion to build a battery cell manufacturing plant with an annual production capacity of 27 gigawatt hours (GWh) initially, Samsung SDI said in a statement.

Shares of Samsung SDI rose as much as 3.2% in morning trade, versus benchmark KOSPI's 0.3% fall.

The plan was first announced in April 2023 when GM and Samsung SDI said the joint venture would cost more than $3 billion, with planned production capacity of 30 GWh and operations to begin in 2026.

The South Korean battery maker said Wednesday the joint plant aims for mass production in 2027 and annual capacity is expected to potentially rise to 36 GWh under expansion plans.

Kurt Kelty, GM vice president of battery cell and pack, said he had joined Samsung SDI's CEO to finalize the battery joint venture.

Kelty said the plant will have the "capability to expand up to 36 GWh, building prismatic cells, which will be added to our battery technology portfolio, helping us to continue to increase performance and lower costs in the future."

Last year, GM said it expected the Indiana plant would have production lines to build both nickel-rich prismatic and cylindrical cells.

In June GM cut its annual EV production forecast as the automaker banks on demand from its gasoline-powered models. GM projected the higher end of its 2024 EV production to be 250,000 units, down from a prior forecast of 300,000 units.

($1 = 1,326.0000 won)

(Reporting by Heekyong Yang and Joyce Lee in Seoul, David Shepardson in Washington; Editing by Chris Reese and Stephen Coates)