(Bloomberg) -- LG Energy Solution Ltd. shares fell in Seoul trading on concern the company may have to hand over a bigger slice of US tax credits that have helped boost profit to battery partner General Motors Co.

The stock fell as much as 5.6% in early trading Friday after the Korea Economic Daily reported that GM asked LG to hand over up to 85% of the tax benefits, even though their Ultium Cells LLC venture is owned 50-50. 

LG Energy is negotiating with the US automaker over how the tax benefits are shared, and no decision has been made, the company said in a text message. 

Since the first quarter, LG has reflected the credits in operating profit, totaling about 427 billion won ($328 million) so far this year. 

Read more: LG Energy Profit Beats Estimates Thanks to Bumper US Tax Credit 

The joint venture is currently building two plants in Tennessee and Michigan. Its first plant, in Ohio, is operating with an annual production capacity of 40 gigawatt-hours. The so-called Advanced Manufacturing Production Credit under the US Inflation Reduction Act grants domestic battery manufacturers a tax credit of $35/kWh for battery cells and an additional $10/kWh for battery modules manufactured and sold in the US from 2023.

“If the news is true, then it could indicate bargaining power is shifting in favor of auto OEMs versus battery makers,” Morgan Stanley analysts, led by Young Suk Shin, wrote in a note. “We believe any negotiations with GM and where both parties settle will be critical as this may serve as a baseline for all Korean battery JV projects in North America.” 

LG is also building battery plants in US with Honda Motor Co. and Hyundai Motor Co. through joint ventures. Rival battery maker Samsung SDI Co. is also building plants through a venture with Stellantis NV and SK On Co. has ventures with Ford Motor Co. and Hyundai. 

--With assistance from Shinhye Kang.

(Adds comment from Morgan Stanley in second-last paragraph.)

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