The Heated Competition to Attract 'K-Battery' Amid the Expansion of Electric Vehicle Adoption

LG·Samsung SDI Additional Investment Confirmed
Global Regional Political and Government Love Calls
Aiming for Job Creation Effects

[Asia Economy Reporter Choi Dae-yeol] As demand for electric vehicle batteries surges, competition to attract Korean battery (K-battery) factories in global regions such as the United States and Europe is intensifying. The battery market is rapidly expanding, and since manufacturing facilities create a considerable number of jobs?uncommon in chemical processes?political and governmental circles in global regions are sending out love calls.

According to industry sources on the 19th, LG Energy Solution has confirmed additional investments in the United States and plans to decide on 2 to 3 additional factory sites within the first half of this year. The company has only specified the production capacity of the new factories (70GWh, enough for 1 million electric vehicles) but has not disclosed specific locations. However, local media expect places like Texas or Michigan, where General Motors (GM) already has vehicle assembly plants, to be likely candidates. This is based on the fact that the battery plants LG has selected so far are located adjacent to local vehicle assembly plants. GM, the largest automaker in North America, has more than 10 vehicle assembly plants in the U.S., including areas like Detroit and other parts of Michigan, Arlington (Texas), and Wentzville (Missouri).

Electric vehicle battery plants, like vehicle assembly plants, have a significant employment creation effect. According to LG, Ultium Cells’ Plant 1 is expected to provide jobs for about 1,100 people, and Plant 2 about 1,300 people. The Holland plant in Michigan, operated by LG since 2012, has an annual production capacity of 5GWh, which is smaller compared to new plants, but employs 1,400 people. This is why local political circles are interested. Previously, there were media reports that LG was interested in acquiring a plant in Spain or building a battery plant in Indonesia, but the industry largely views these as reflections of local governments’ or political circles’ ‘expectations.’

Battery production plant being built by Ultium Cells, a joint venture between LG Energy Solution and General Motors (GM), in Rose Town, Ohio, USA

U.S. Vehicle Assembly Plants, Led by Michigan, Extend to the Midwest and South
Battery Industry Continues to Expand Local Production Bases

Details on what specific incentives battery companies received during the site selection process have not been disclosed. Based on other precedents, it is highly likely that agreements included financial benefits such as land provision or use of logistics and production infrastructure, as well as tax reductions. LG has been increasing local facilities through a greenfield project approach?directly securing land and building factories?since the second half of last year, in line with the U.S. administration’s Green New Deal and other eco-friendly policy directions. Since LG is also considering local production of batteries for energy storage systems (ESS) in addition to electric vehicle batteries, there is a possibility that sites will be selected independently of vehicle assembly plants.

SK Innovation, having resolved uncertainties about its U.S. business, is expected to build Plants 3 and 4 near its currently under-construction Plant 2 in Commerce, Georgia. The company has previously stated its intention to develop a large-scale production base when selecting the site.

Love calls from various U.S. regions have also begun toward Samsung SDI, which has not yet established electric vehicle battery production facilities in the U.S. Samsung SDI has many transactions with European automakers such as BMW and Volkswagen, whose plants are concentrated in the southeastern U.S. regions like Georgia and South Carolina.

This content was produced with the assistance of AI translation services.