LG Chem Vice Chairman and CEO Shin Hak-cheol (5th from L), Tennessee Gov. Bill Lee (6th from L) and other officials attend the groundbreaking ceremony of the company’s cathode plant in the U.S. state on Dec. 19, 2023, in this photo provided by LG Chem Ltd. (Image courtesy of Yonhap)
SEOUL, Dec. 20 (Korea Bizwire) — LG Chem Ltd., South Korea’s leading chemical firm, said Wednesday it has started the construction of a 1.8 trillion-won (US$1.4 billion) cathode plant in the United States to meet the rising demand for electric vehicles (EVs).
LG Chem’s 60,000-ton-a-year cathode plant will start production in 2026 with an aim to supply the key battery component to clients in the U.S., the world’s most important automobile market, the company said in a statement.
Cathodes consist of nickel, cobalt, manganese and aluminum. The quality and content of these minerals in lithium-ion battery cells and the manufacturing technology determine the capacity and life of an EV.
With 60,000 tons of cathodes, carmakers can produce 600,000 units of EVs with a driving range of 500 kilometers on a single charge, the statement said.
On Tuesday (U.S. time), the company held a groundbreaking ceremony for the cathode plant, the first factory of its kind in the U.S., in Clarksville in the southeastern state of Tennessee.
“We are aiming to emerge as the No. 1 cathode supplier in the U.S. market by providing a differentiated value to our customers there,” LG Chem Vice Chairman and CEO Shin Hak-cheol said in the statement.
The Clarksville plant will help LG Chem’s clients, both car battery makers and EV manufacturers, satisfy the U.S. Inflation Reduction Act (IRA) to receive tax credits, the chairman said.
The IRA requires 50 percent of the value of battery components to be assembled in North America to receive a $3,750 credit and 40 percent of the value of critical minerals sourced from the U.S. or a free trade partner for a separate $3,750 credit.
LG Chem plans to double the annual output capacity to 120,000 tons depending on market demands.
The company has already secured two major cathode supply deals with General Motors Co. and Toyota Motor Corp.
Last year, LG Chem signed a long-term deal to supply 950,000 tons of cathodes to GM plants. In October this year, it inked a 2.9 trillion-won contract with Toyota to provide cathodes to the Japanese carmaker’s U.S. plant, the statement said.
(Yonhap)
