SEOUL, Nov 22 (Reuters) – South Korea’s LG Chem Ltd ( 051910.KS ) said on Tuesday it would invest more than $3 billion in a cathode battery plant in Tennessee, stepping up plans to meet growing U.S. demand for electric vehicles. announced. components.
It is one of the first electric vehicle-related investments announced by a South Korean firm in the United States since the new U.S. law passed in August, leaving automakers and battery suppliers heavily reliant on China for lower costs.
LG Chem said the plant will start mass production in the second half of 2025 and will create more than 850 jobs.
The plant plans to produce 120,000 tons of cathode material by 2027, enough to power 1.2 million electric cars.
Its shares rose 1.9% on the news, leaving the market down 0.3% (.KS11).
LG Chem added that it is working with mining firms and refining companies to better support its customers in order to meet the new legislative requirements of the Anti-Inflation Act.
LG Chem is expected to supply cathode materials to Ultium Cells, a battery joint venture between General Motors ( GM.N ) and LG Chem subsidiary LG Energy Solution Ltd ( LGES ) ( 373220.KS ).
LGES, which supplies batteries to Tesla Inc ( TSLA.O ), Ford Motor Co ( FN ) and Hyundai Motor Co ( 005380.KS ), last month raised its 2022 revenue forecast to 25 trillion won ($18.4 billion) from 22 trillion won. , citing new projects from automakers.
LG Chem’s new plant will make cathodes for batteries with nickel-cobalt-manganese-aluminum (NCMA) chemistry. NCMA batteries are approximately 90% nickel, allowing manufacturers to reduce their dependence on expensive cobalt and reduce exposure to processing and processing in China.
China currently owns 75% of the world’s cobalt processing capacity and 50% of lithium processing capacity, according to Benchmark Mineral Intelligence.
GM says LG Chem’s NCMA battery cathode will be used in a variety of EVs using Ultium brand batteries.
Among other measures, the anti-inflation law would require batteries to source at least 40 percent of the value of silver, an important mineral, from the U.S. or an American free trade partner to qualify for U.S. tax credits starting next year. This percentage will increase to 80% in 2027.
Automakers such as Hyundai Motor ( 005380.KS ) and Kia Corp ( 000270.KS ) were hit hard by the new law, which saw the immediate suspension of loans for about 70 percent of the 72 cars that were previously eligible for subsidies for electric engines.
At this month’s G20 summit, South Korean President Yoon Suk-yeol asked US President Joe Biden to prevent South Korean companies from taking discriminatory measures, his office said.
Biden responded that the implementation of this law should take into account the contribution of South Korean investment to the US economy.
(1 dollar = 1,358.1800 won)
Reporting by Heekyong Yang; Directed by Muralikumar Anantharaman and Edwina Gibbs
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