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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 suppliers to battery level depends a lot on China for sourcing at a disadvantageous cost.

LG Chem said in a statement that mass production will begin outside of Clarksville in the second half of 2025 and that 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 cooperation 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 common engine and LG Chem’s subsidiary LG Energy Solution Ltd (LGES).

LGES, which supplies batteries for Tesla company, Ford Motor Co and hyundai Motor Co, among others, last month raised its 2022 revenue outlook to 25 trillion won ($18.4 billion) from $22 trillion, citing new projects from automakers. bowl.

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 has said it will use LG Chem’s NCMA battery cathode for a range of electric vehicles using 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 be 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 that Corp. has been hit hard by the new law, which immediately ended credits for about 70 percent of the 72 auto models previously eligible for EV subsidies.

In this month G20 South Korean President Yoon Suk-yeol suggested the US President Joe Biden to prevent 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.

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