Major Korean battery and battery material producers are announcing large-scale investments in the U.S. state of Tennessee.
On Nov. 28 (local time), Tennessee’s Funding Board decided to provide subsidies of US$40 million to LG Chem for its establishment of a cathode material plant. The state subsidies will be used for the construction of the cathode material plant.
Of special note is that this incentive payment was finalized just one week after LG Chem announced its large-scale investment. On Nov. 21, LG Chem vice chairman Shin Hak-chul and Tennessee Governor Bill Lee signed an MOU to build a cathode material production plant with an annual capacity of 120,000 tons. It will be the largest cathode material plant in the United States. The amount invested in this construction and expansion is expected to reach about US$3.2 billion over the next eight years. Tennessee’s Funding Board chaired by the governor quickly passed the agenda in a fast-track manner.
Apart from LG Chem, Korean battery and materials companies are investing in Tennessee. Blue Oval SK, a joint venture between SK On and Ford, announced last year that it would invest US$5.6 billion, about half of its total investment of US$11.4 billion in the United States, in the construction of Blue Oval City, a battery and electric vehicle production plant in Tennessee. The plant’s battery production capacity is expected to reach 43GWh, the largest in the United States as a single plant.
Ultium Cells, a joint venture between LG Energy Solutions and General Motors, is also building its second joint plant in the United States and Enchem, a Korean company specializing in secondary battery materials, picked out Tennessee as one of its four new production bases in the United States.
Analysts say that an investment rush by Korean companies was driven by their judgment that Tennessee is becoming the center of a battery supply chain. A joint plant between LG Energy Solution and SK On is under construction in Tennessee. Tennessee is also close to Georgia and Alabama where global automakers such as Hyundai and Kia have factories. Georgia which is adjacent to Tennessee is advantageous in importing raw materials because it has a port.
