LG Chem to invest $3bn in US plant for EV parts

LG Chem_ the South Korean company has announced plans to invest $3 billion 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 over 850 jobs_ LG Chem said in a statement on Tuesday.

The plant will have an annual production capacity of 120_000 tonnes in 5 years_ 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 go for 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.