South Korea’s LG Chem to invest $3bn in US plant for EV parts | Technology

November 22, 2022 0 By Cypher9ja

South Korean firm says facility will produce components to power 2 million electric vehicles by 2027.

South Korea’s LG Chem has announced plans to invest $3bn in the construction of a manufacturing facility for electric vehicle components in the United States.

The battery cathode production facility in Clarksville, Tennessee, will be the largest of its kind in the US, creating more than 850 jobs, LG Chem said in a statement on Tuesday.

The plant will have an annual production capacity of 120,000 tonnes by 2027, producing components to power 2 million electric vehicles, the South Korean firm said.

“The new cathode manufacturing facility in Tennessee brings us one step closer to becoming the world’s best battery materials manufacturer and fulfilling our corporate vision to become a top global science company,” LG Chem Chief Executive Shin Hak-cheol said.

“This site will be the North American manufacturing centre of excellence for the cathode supply chain and lead to the creation of many well-paying jobs, contributing to the local economy in Clarksville.”

The announcement of the plant, which is slated to start production in 2025, comes after US President Joe Biden in August signed a climate and energy bill that denies tax credits to electric carmakers that heavily source components from China.

Under the Inflation Reduction Act, manufacturers are required to source 40 percent of critical minerals for batteries from the US or one of its free-trade partners to benefit from tax relief, with the share rising to 80 percent in 2027. China currently controls more than half of the global EV battery market, which Washington views as a national security concern.

South Korean carmakers, including Hyundai Motor, have protested the law, which slashed tax relief for most of its EV models.

South Korean President Yoon Suk-yeol’s office said he raised the issue with Biden at the G20 leaders’ summit last week, asking his counterpart to ensure South Korean firms do not face discriminatory policies.

LG Chem said the new facility would enable it to respond to the “changing dynamics” of the global battery material market and the Inflation Reduction Act, with the plant functioning as a “supply chain hub” where material and recycling partners work together to supply global customers.