LG Chem builds $3 billion Tennessee cathode plant for GM Ultium EV batteries
SEOUL — South Korean company LG Chem Ltd on Tuesday said it will invest more than $3 billion to build a the battery cathode plant in Tennessee, as it ramps up plans to meet growing demand for the United States tram the components.
It is one of the first major EV-related investments announced by a Korean company in the United States since new U.S. legislation was passed in August prompting automakers and manufacturers to Battery supply that relies heavily on China for sourcing is at a cost disadvantage.
LG Chem said in a statement that mass production will begin outside of Clarksville in the second half of 2025 and the factory will create more than 850 jobs. The plant is expected to have an annual production capacity of 120,000 tons of cathode material by 2027, enough to power about 1.2 million electric vehicles.
Its shares jumped 1.9% on the news, outperforming the broader market’s 0.3% drop.
LG Chem added that it is also pursuing partnerships with mining companies and recycling companies to better support customers in order to meet the requirements of the new law, the Inflation Reduction Act.
LG Chem is expected to supply cathode materials for Ultium Cells, a battery joint venture between General Motors and LG Chem subsidiary LG Energy Solution Ltd (LGES).
LGES, which supplies batteries to Tesla Inc, Ford Motor Co and Hyundai Motor Co.
LG Chem’s new factory will manufacture battery cathode using nickel, cobalt, manganese and aluminum (NCMA) chemicals. NCMA batteries, which are about 90% nickel, allow manufacturers to reduce their reliance on expensive cobalt and reduce their exposure to refining and processing in China.
According to Benchmark Mineral Intelligence, China currently has 75% of the world’s cobalt refining capacity and 50% of the world’s lithium processing capacity.
GM says it will use LG Chem’s NCMA battery cathode for a range of electric vehicles that use Ultium-branded batteries.
The Inflation Reduction Act, among other measures, will require from next year that at least 40% of the monetary value of minerals important to batteries come from the United States or a free trade partner of United States to qualify for the US tax credit. That percentage will increase to 80% by 2027.
Automakers such as Hyundai Motor and Kia Corp have been hit hard by the new law, which immediately ends credits for about 70 percent of the 72 auto models previously eligible for credit. EV subsidies.
At the G20 summit this month, South Korean President Yoon Suk-yeol asked US President Joe Biden to stop discriminatory measures against South Korean companies, his office said.
It added that Biden responded that law enforcement must take into account the contribution of Korean investment to the US economy.
