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[Asia Economy Reporter Hwang Yoon-joo] POSCO Chemical has chosen the United States, considered the world's largest electric vehicle market, as its first overseas cathode material factory location. This decision was made because the three major domestic battery companies, which are key customers, have decided on large-scale investments in the U.S., making it advantageous to establish a cathode material factory nearby. Starting next year, POSCO Chemical plans to gradually expand its overseas production bases, beginning with the U.S. and then Europe.

According to industry sources on the 1st, POSCO Chemical has finalized the U.S. as the investment region for its cathode material factory and is closely reviewing investment conditions in states such as Tennessee and Ohio through the Overseas Investment Task Force (TF) under the Energy Materials Headquarters.

LG Energy Solution, POSCO Chemical's largest customer, is building factories in Ohio and Tennessee in partnership with General Motors (GM), while SK On is constructing plants in Kentucky and Georgia, regions directly above and below, in collaboration with Ford. The TF team, established in July to handle overseas investment tasks exclusively, is currently surveying the new automotive and battery belt regions in the U.S., focusing on these areas. Based on the TF team's report, once the investment location is finalized, POSCO Chemical plans to establish a U.S. corporation. The U.S. investment funds will utilize the 1.2 trillion KRW raised through a previously arranged capital increase.

POSCO Chemical's selection of the U.S. as its first overseas investment site is based on the expectation of explosive growth in cathode material demand due to the expansion of its major customers. The battery production capacity announced by LG Energy Solution and SK On in the U.S., including joint venture investments, reaches 150 GWh and 150.5 GWh respectively. This capacity can produce approximately 2.15 to 2.5 million electric vehicles annually (based on 60-70 kW per vehicle).

Accordingly, demand for battery materials such as cathode materials is also expected to surge. According to POSCO, global electric vehicle demand is projected to reach 40 million units by 2030. When producing cathode materials domestically and supplying them to overseas customers, only 10 to 20 tons can be loaded per container (40-foot standard). This corresponds to about 6 to 12 MWh of battery cells, making it more advantageous to establish production plants locally.

The Biden administration's eco-friendly policies and the "Buy American" initiative have also influenced the decision to invest in the U.S. Although the U.S. has a structure where companies bear full responsibility for workers' health insurance and welfare, making investment costs substantial, the federal and state governments offer various benefits such as site acquisition and tax incentives to attract overseas investments related to electric vehicles.

POSCO Chemical's overseas investment is part of POSCO Group's effort to build a secondary battery (battery) material value chain. POSCO supplies raw materials such as lithium and nickel, while POSCO Chemical produces cathode and anode materials. POSCO Chemical plans to expand its cathode material production capacity from the current 45,000 tons to 275,000 tons by 2025. The goal is to establish a production system of 160,000 tons domestically and 110,000 tons overseas. By 2030, the plan is to increase cathode material production to 400,000 tons (240,000 tons overseas). Through domestic and overseas investments and sales, POSCO Chemical aims to achieve annual sales of 23 trillion KRW in cathode and anode materials.

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