South Korea’s LG Chem has announced that it will invest more than $3 billion to build a battery cathode factory in Tennessee as it continues to meet demands for U.S electric vehicle components.
The company has said that it is one of the first major EV-related investments announced by a South Korean firm in the United States since a new U.S law was passed in August that puts automakers and battery suppliers relying heavily on China for sourcing at a cost disadvantage.
The plant is said to have an annual production capacity of 120,000 tons of cathode materials by 2027 which would be enough to power about 1.2 million electric vehicles.
LG Chem has also said that it is pursuing cooperation with mining firms and recycling companies to better support its customers so that the requirements of the new Inflation reduction Act can be met.
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, according to Reuters.
LG Chem’s new plant will make cathodes for batteries with nickel, cobalt, manganese and aluminum 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.