Capital spending and new manufacturing plants are a long-term issues, but the market might just be underweighting the importance of GM’s Friday move.

“The addition of our second all-new Ultium battery cell plant in the U.S. with our joint venture partner LG Energy Solution is another major step in our transition to an all-electric future,” said GM CEO Mary Barra in the company’s news release. LG Energy Solution is owned by LG Chem (051910.Korea).

The 2.8 million-square foot facility will go up in Tennessee and will cost about $2.3 billion, creating about 1,300 jobs.

The decision to build the plant is another step in GM’s transformation into a serious EV player. The company has committed to spending about $27 billion between 2021 and 2025 to launch 30 EV models around the globe. And it has said it aims to be selling only EVs by 2035.

Getting the batteries to power all those cars isn’t a trivial matter. Batteries are becoming an EV battleground.

Morgan Stanley’s Adam Jonas, for instance, worries that there might not be enough batteries to meet all auto makers’ EV ambitions. In a recent research report, he called the LG/GM joint venture critical to GM’s success in EVs, partly because it mitigates the risk of battery shortages.

The possibility that there might be shortages is one reason companies are investing in their own factories to produce them, rather than taking their chances in the marketplace. How much battery production GM controls, and what share of its needs the company plans to meet in-house, isn’t known.

GM wasn’t immediately available to comment on the size of the new plant, or its strategy for sourcing batteries.

Investors are starting to view GM as a long-term EV winner. The stock is up more than 40% year to date and trades for almost 12 times the per-share earnings expected for 2021 earnings. That is still a discount to the market’s P/E ratio of 24 times, but the figure for GM has been in the single digits for years.

Write to Al Root at allen.root@dowjones.com