SEOUL, April 16 (Korea Bizwire) — South Korean battery maker LG Energy Solution Ltd. said Friday it will spend 1.06 trillion won (US$950 million) to build a battery factory in the United States with American automaker General Motors Corp.
In a regulatory filing, LG Energy, wholly owned by LG Chem Ltd., said that it and GM will each invest the same amount in their joint venture, Ultium Cells, to step up electric vehicle (EV) battery production in the U.S.
Together with 600 billion won worth of loans, the total investment for the factory is expected to be worth 2.7 trillion won, a LG Energy spokesperson said.
According to industry sources, Ultium Cells has picked Tennessee for the plant, with GM set to announce the investment plan on Friday (local time).
LG Energy said it will announce detailed plans after GM’s official announcement.
LG Energy currently operates a lithium-ion battery factory in Michigan and is building a new factory in Ohio through Ultium Cells, which will be completed in 2022.
The planned construction of the EV battery factory came as GM plans to phase out internal combustion engine cars by 2035 and set a goal of offering 30 all-electric models by the middle of the decade, which would require a stable supply of EV batteries.
The world’s No. 2 battery maker said last month it plans to invest more than 5 trillion won to expand U.S. battery production capacity by 2025, including a scheme to build at least two new plants.
LG Energy vowed to step up its EV battery business in the U.S. after recently reaching an agreement on a two-year-long trade secret suit over EV battery technology.
Its smaller home rival SK Innovation Co. agreed to pay 2 trillion won to LG Energy.