LG Chem to Build Largest Battery Cathode Material Plant in the US (Update)

Over $3 Billion Investment by 2027
Annual Production Capacity of 120,000 Tons
Production Volume Equivalent to Approximately 1.2 Million High-Performance Pure Electric Vehicles

Shin Hak-cheol, Vice Chairman of LG Chem (left), is shaking hands with Bill Lee, Governor of Tennessee, on the 22nd (local time) after signing a memorandum of understanding (MOU) for the establishment of a cathode material plant.

[Asia Economy Reporter Choi Seoyoon] LG Chem is set to build the largest cathode material factory in the United States with an annual capacity of 120,000 tons.

On the 22nd, LG Chem announced that it held a memorandum of understanding (MOU) signing ceremony for the construction of a cathode material factory in Clarksville, Tennessee. The ceremony was attended by Shin Hak-cheol, Vice Chairman of LG Chem, Bill Lee, Governor of Tennessee, and Stuart McHolter, Commissioner of the Tennessee Department of Economic and Community Development.

LG Chem plans to invest over $3 billion (approximately 4 trillion KRW) solely to build a factory on a site of about 1.7 million square meters in Clarksville, Tennessee, securing an annual production capacity of 120,000 tons of cathode materials. This capacity is enough to produce batteries for approximately 1.2 million high-performance pure electric vehicles (EVs with a 500 km driving range) annually, making it the largest scale in the U.S.

The Tennessee cathode material factory will begin construction in the first quarter of next year and start mass production by the end of 2025. The production lines will be expanded to reach an annual capacity of 120,000 tons by 2027.

Through the Tennessee cathode material factory, LG Chem plans to actively respond to changes in the global battery materials market, including the U.S. Inflation Reduction Act (IRA). Once the IRA is enacted, LG Chem expects to receive tax benefits from the U.S. government. LG Chem is also working with mineral and recycling companies to establish raw material supply chains so that its global customers can meet the EV subsidy criteria under the IRA.

Expected aerial view of LG Chem's cathode material plant in Tennessee, USA. Photo by LG Chem

LG Chem is increasing its production capacity to meet the cathode material demand from global EV manufacturers and battery companies. LG Chem aims to grow its battery materials business, including cathode materials, from approximately 5 trillion KRW in sales in 2022 to about 20 trillion KRW by 2027, a fourfold increase.

Annual 10,000 tons per line ‘Industry-leading productivity’... Planned operation with 100% renewable energy

The Tennessee factory will produce high-nickel NCMA (Nickel-Cobalt-Manganese-Aluminum) cathode materials for next-generation EV batteries, a product LG Chem is focusing on developing. NCMA cathode materials combine LG Chem’s advanced material technology by increasing nickel content, which determines energy density, while applying aluminum for enhanced stability, achieving both high output and safety.

The production lines have been optimized with advanced calcination process design technology, raising the annual output per line to over 10,000 tons. This is an industry-leading productivity level, first applied globally at LG Chem’s Cheongju Cathode Material Plant 4. Additionally, LG Chem plans to utilize smart factory technology at the Tennessee plant to automate all production processes and establish quality analysis and management systems to enhance factory operations.

To proactively meet customer demands for renewable energy use from battery and EV manufacturers, LG Chem will collaborate with local Tennessee power suppliers near the site. The Tennessee cathode material factory is planned to operate entirely on 100% renewable energy sources such as solar and hydro power.

Location of LG Chem's Tennessee cathode material plant. Photo by LG Chem

Tennessee offers property tax incentives on facilities and land... GM-LG Energy Solution’s ‘Ultium Cells’ battery plant also located there

Tennessee, located in the U.S. Midwest and East, offers excellent geographic accessibility for customer deliveries and raw material imports, as well as property tax incentives on facilities and land from state and local governments. Tennessee is also home to the battery plant of Ultium Cells, a joint venture between General Motors (GM) and LG Energy Solution.

At the MOU signing ceremony, Bill Lee, Governor of Tennessee, said, “We are pleased that LG Chem has chosen Tennessee, and the investment of over $3 billion demonstrates Tennessee’s leadership in the EV industry. Tennessee’s workforce and business-friendly environment will also be attractive to LG Chem.”

Stuart McHolter, Commissioner of the Tennessee Department of Economic and Community Development, stated, “We appreciate LG Chem’s significant investment and look forward to building a successful partnership with LG Chem in the future.”

Vice Chairman Shin Hak-cheol said, “The Tennessee cathode material factory will be a core base for LG Chem’s future growth engine and next-generation battery materials business. We will actively respond to the rapidly changing battery materials market and global customer demands to become the world’s leading comprehensive battery materials company.”

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