LG Chem CEO Shin Hak-cheol, fifth from left, and Tennessee Gov. Bill Lee, sixth from left, join other officials at the groundbreaking ceremony for a new cathode plant in Tennessee on Tuesday. Photo courtesy of LG Chem
South Korea’s LG Chem announced it has broken ground on the construction of a cathode material factory in Montgomery County, Tenn.
The factory will churn out EV-optimized cathode materials for use in the United States and Canada. Cathode serves as a major component in rechargeable batteries. Advertisement
The Seoul-based company said Wednesday it plans to spend $1.6 billion during the first phase of the construction for a factory that will have an annual capacity of 60,000 tons.
Forecast to be the largest in terms of capacity by 2026, the U.S. factory is expected to produce enough materials to equip 600,000 high-performance electric vehicles annually.
Depending on demand, the company said it could make further investments to raise the Tennessee plant’s capacity. Its affiliate, LG Energy Solution, is the world’s leading EV battery maker.
LG Chem’s new U.S. plant is aimed at meeting the rising demand for EV batteries.
Last year, LG Chem signed a long-term contract for providing 950,000 tons of cathode materials to General Motors.
In October, it signed a similar contract worth $2.5 billion with Toyota North America.
Tuesday’s groundbreaking was attended by LG Chem’s CEO Shin Hak-cheol and Tennessee Gov. Bill Lee. Advertisement
“With the Tennessee cathode material plant as the center, LG Chem will undoubtedly leap to become the top cathode material supplier in North America,” Shin said at the event.
“LG Chem will execute the vision to become the world’s leading comprehensive battery material company, establishing a stable supply chain resilient to any environment.”
Lee also expressed high hopes for the new factory.
“Tennessee’s pro-business environment and skilled workforce provide global companies with the tools they need to succeed,” he said.
Industry experts point out that LG Chem’s investment is in part a response to the Inflation Reduction Act from Biden administration.
The IRA, signed by U.S. President Joe Biden last year, mandates electric cars be assembled in North America to qualify for tax credits.
“LG Chem has no choice but to invest in the U.S. Other Korean companies with EV links are also likely to make similar forays,” Daelim University automotive Professor Kim Pil-soo told UPI News Korea.
