South Korean company LG Chem plans to allocate $820m to set up a battery cathode factory in the US

LG Chem, the leading South Korean chemical company is embarking on an $820 million investment to establish a battery cathode plant in Tennessee, USA. LG Chem has already demonstrated its commitment by investing $38 million in a European Customer Solution Centre in Frankfurt, offering technical services for product development and production efficiency.

Last year, LG Chem revealed plans to invest up to $3 billion in this endeavor by 2027, showcasing its dedication to capturing a share of the growing battery material market. The company, recognized as South Korea's largest chemicals maker is making its mark in North America with the construction of a $3.2 billion cathode plant in Tennessee. 

This facility, LG Chem's first cathode factory in the US aims to meet the surging demand for lithium-ion batteries. Scheduled for construction in the first quarter of the upcoming year on a vast 1.7 million square meter site, the plant is anticipated to achieve mass production by the second half of 2025.

LG Chem envisions producing 120,000 tons of cathodes annually by 2027 which is enough to power 1.2 million electric vehicles with a 500 km range per charge.

The cathode, a vital component for rechargeable batteries, constitutes around 40% of the cost of electric vehicle batteries. Recognizing the strategic importance of a stable cathode supply amid rising mineral costs, LG Chem CEO Shin Hak-cheol emphasized the significance of the new Tennessee facility in positioning the company as a leading global battery materials manufacturer.

LG Chem's commitment to sustainability is evident in its plan for the new factory to operate on 100% renewable energy and incorporate smart factory technology for streamlined production. With a focus on advanced technology, the plant aims to produce over 10,000 tons of cathode material per line, setting an industry standard.

Tennessee Governor Bill Lee welcomed LG Chem's decision highlighting the state's business climate, skilled workforce, and leadership in the automotive industry. The investment is expected to create over 850 new jobs in Montgomery County. The choice of Tennessee is strategic for LG Chem due to its proximity to key customers, efficient transportation of raw materials, and cooperative support from state and local governments.

Furthermore, LG Chem anticipates that the Tennessee facility will play a pivotal role in achieving its ambitious goal of quadrupling its global battery materials business to 20 trillion won ($14.8 billion) by 2027. 

The company aims to address evolving dynamics in the global battery material market, aligning with legislative changes such as the Inflation Reduction Act signed by US President Joe Biden. This act incentivizes the use of locally sourced materials in electric vehicle batteries, aligning with LG Chem's forward-looking strategy.