Reuters: LG Chem Plans to Build a New US$1.7 Billion EV Battery Plant in the US
LG Chem, South Korea’s major manufacturer of powertrain batteries for electric vehicles (EVs), is contemplating on investing a second battery production plant in the US so as to meet the increasing demand from American car makers, according to an exclusive report from Reuters on July 11. Sources with knowledge on this matter told Reuters that LG is planning to commit as much as US$1.7 billion into this project, and that the new plant could be up and running as early as 2022.
LG Chem is currently one of the leading suppliers worldwide for EV batteries. Its clients include titans in the automotive industry such as GM and Volkswagen. The proposal to build a second US plant reflects an increasingly bullish outlook on the powertrain battery market, which has seen surging demand on account of car markers scrambling to expand their EV offerings. Currently, Kentucky and Tennessee are the candidates for the location of the US$1.7 billion project. Reuters reported that the decision on whether to proceed with this investment will be finalized by the end of July.
According to one of the sources, the proposed plant will be making batteries primarily for EV models under Volvo and Fiat Chrysler. However, its production mix may eventually expand to include batteries for EVs sold by Hyundai Motor, GM, Volkswagen, etc.
In the recent years, governments worldwide have started to further tighten the emission regulations for traditional fuel vehicles and encourage the production of various types of hybrid and all-electric vehicles. Consequently, car makers are compelled to adjust their operational strategies and invest in new production facilities that will be instrumental in extending their lineups of EV models. Sensing the arrival of massive business opportunities, major battery suppliers are also expanding their production capacity for powertrain batteries in order to grab a larger share of this market. The competition has become extremely fierce.
SK Innovation, another Korean battery manufacturer and LG Chem’s main rival, began the construction of its first US plant earlier this year. Approximately US$1 billion has been committed for the first phase of this project, and the plant, once built, will be supplying batteries to Volkswagen. It is also worth mentioning that LG Chem and SK Innovation are currently locked in a legal battle over trade secrets in the US. Specifically, SK Innovation is accused of sending out EV battery samples containing technologies owned by LG Chems.
LG Chem’s current US plant is jointly operated with GM and is producing batteries for the Chevrolet Bolt. Besides the US and South Korea, other countries where LG Chem has established production bases include China and Poland. Regarding the second US plant, Shin Hak Cheol, LG Chem’s CEO, told Reuters that his company is still evaluating the potential sites for the project.
Source: energytrend
