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| LG Chem CEO Shin Hak-cheol, left, shakes hands with Tennessee Governor Bill Lee after signing a memorandum of understanding regarding the construction of a cathode materials plant in Clarksville, Tennessee, Monday (local time). Courtesy of LG Chem |
By Park Jae-hyuk
LG Chem signed a memorandum of understanding with the U.S. state of Tennessee to invest over $3 billion in the construction of a cathode materials plant that can produce up to 120,000 tons of the battery component on a 1.7-million-square-meter site in the southeastern state, the company said Tuesday.
The annual production capacity is equivalent to the amount of cathode materials needed to manufacture batteries for 1.2 million high-performance electric vehicles (EVs). The capacity is also larger than that of any other cathode materials plant in the U.S.
LG Chem said it will start construction in the first quarter of next year, with the aim of beginning mass production in late 2025. It will then gradually increase annual production capacity to 120,000 tons by 2027.
With the new factory in Tennessee, the chemical firm plans to be able to comply with the U.S. Inflation Reduction Act (IRA), which provides a tax credit to U.S. consumers who purchase EVs assembled in North America. All vehicle battery components must be manufactured or assembled in North America, and their critical minerals sourced from the U.S. or countries that have free trade agreements with the U.S.
LG Chem said it seeks cooperation with minerals and recycling firms to help its global clients satisfy the requirements to be eligible for the tax credit under the new U.S. law.
"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 CEO Shin Hak-cheol said. "This site will be the North American manufacturing center of excellence for the cathode supply chain and lead to the creation of many well-paying jobs, contributing to the local economy in Clarksville."
Tennessee Governor Bill Lee also expressed his gratitude to LG Chem for creating more than 850 new jobs and providing opportunities to Tennesseans across Montgomery County, where Clarksville is located.
"LG Chem's decision to invest $3.2 billion in Clarksville is a testament to Tennessee's unmatched business climate, skilled workforce and position as a leader in the automotive industry," the governor said.
