South Korea’s LG Chem to Build $3 Billion Cathode Plant in the U.S.
- November 22, 2022
- Posted by: Quatro Strategies
- Category: Manufacturing
South Korean chemicals company LG Chem announced its plans to invest $3 billion to build a cathode plant in the U.S. state of Tennessee, as the company looks to utilize U.S. Inflation Reduction Act’s (IRA) tax credit scheme and meet rising demand for electric vehicle (EV) components in North America. The announcement marks one of the first major EV-related investment by a South Korean firm in the United States since the IRA was signed by Biden into law in August.
The new plant will start mass production in the second half of 2025, LG Chem said in a statement. The factory’s production capacity will be 120,000 tons of cathode materials by 2027, enough to power around 1.2 million EVs.
LG Chem added that it is also pursuing cooperation with mining firms and recycling companies to better support its customers so that requirements of the new law, the Inflation Reduction Act, can be met.
The company is expected to supply cathode materials from the new plant to Ultium Cells, a battery joint venture between General Motors and LG Chem’s subsidiary LG Energy Solution (LGES).
LG Chem’s new plant will make cathodes for batteries with a nickel, cobalt, manganese and aluminum (NCMA) chemistry. The NCMA battery, which is about 90% nickel, allows manufacturers to reduce their reliance on expensive cobalt, and reduce their exposure to refining and processing in China.
China currently has 75% of the world’s cobalt refining capacity and 50% of the lithium processing capacity.
The Inflation Reduction Act will, among other measures, require from next year that at least 40% of the monetary value of critical minerals for batteries be from the United States or an American free-trade partner in order to qualify for U.S. tax credits. That share will rise to 80% in 2027.
South Korean automakers Hyundai and Kia have been especially hit hard by the new measures, which immediately ended credit for about 70% of the 72 models that were previously eligible for tax credits.
At this month’s G20 summit, South Korean President Yoon asked Biden to prevent discriminatory measures against South Korean companies.
Subscribe to Top Insights Today
The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights
Join the ranks of global executives and subscribe to Top Insights Today
Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business
Read more insights
Special Report-U.S. to Sell Four Armed Drones to Ukraine Within Days
The United States looks to strengthen Ukraine’s military capabilities against Russia further, with a plan to sell four MQ-1C Gray Eagle drones that can be armed with Hellfire missiles.
Special Report-European Power Prices Are Dependent on Wind
Part of Europe’s energy crunch this year was due to wind speeds not being high enough so windmills across the continent generated less electricity. Because of low power generation from wind, utilities had to turn to scarce and expensive coal and natural gas to meet demand.
Italy’s Enel Eyes Oklahoma As the Site of Its U.S. Solar Panel and Cell Plant
Italy’s Enel said on Tuesday the state of Oklahoma is the leading candidate to become the location of its major U.S. solar panel and cell plant it first announced last year. The facility is expected to become one of the biggest solar cell factories in the United States, where most domestically-assembled panels are built with imported equipment. Last year, the Italian utility said it was planning to produce at least 3 GW of modules and cells per year with a view to eventually double that capacity. Enel’s investment also marks one of the biggest corporate commitments to solar manufacturing since the U.S. Inflation Reduction Act (IRA) was signed into law last August.