Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

LG Chem to invest over $3 billion to build U.S. battery cathode plant

Stock Markets Nov 22, 2022 12:51PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The logo of LG Chem is seen at its office building in Seoul, South Korea, October 16, 2020. REUTERS/Kim Hong-Ji/File Photo
 
GM
-0.89%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
TSLA
+0.91%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
F
-7.61%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Heekyong Yang

SEOUL (Reuters) -South Korea's LG Chem Ltd said on Tuesday it will invest more than $3 billion to build a battery cathode factory in Tennessee, as it ramps up plans to meet rising demand for U.S. electric vehicle components.

It's 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.

Mass production is set to start in the second half of 2025 and the plant will create more than 850 jobs, LG Chem said in a statement.

The plant is slated to have an annual production capacity of 120,000 tonnes of cathode materials by 2027, enough to power about 1.2 million electric vehicles, it added.

Its shares climbed 1.9% on the news, outperforming a 0.3% decline for the broader market.

LG Chem added that it is also pursuing cooperation with mining firms and recycling companies to better support its customers so that requirements of the new law, the Inflation Reduction Act, can be met.

LG Chem is expected to supply cathode materials to Ultium Cells, a battery joint venture between General Motors (NYSE:GM) and LG Chem's subsidiary LG Energy Solution Ltd (LGES).

LGES, which supplies batteries to Tesla (NASDAQ:TSLA) Inc, Ford Motor (NYSE:F) Co and Hyundai Motor Co among others, last month raised its 2022 revenue outlook to 25 trillion won ($18.4 billion) from 22 trillion, citing new projects from automakers.

LG Chem's new plant will make cathodes for batteries with a nickel, cobalt, manganese and aluminum (NCMA) 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.

China currently has 75% of the world's cobalt refining capacity and 50% of the lithium processing capacity, according to Benchmark Mineral Intelligence.

GM has said it will use NCMA battery cathodes from LG Chem for a range of EVs using Ultium-branded batteries.

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. That share will rise to 80% in 2027.

Automakers such as Hyundai Motor and Kia Corp have been hit hard by the new law, which immediately ended credits for about 70% of the 72 car models that were previously eligible for EV subsidies.

At this month's G20 summit, South Korean President Yoon Suk-yeol asked U.S. President Joe Biden to prevent discriminatory measures against South Korean companies, his office said.

It added Biden had replied that the implementation of the law should account for the contribution of South Korean investment in the U.S. economy.

($1 = 1,358.1800 won)

LG Chem to invest over $3 billion to build U.S. battery cathode plant
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email