Tesla, GM supplier LG to invest more than $3 billion for battery cathode facility in TN

Image used with permission for Teslarati. (Credit: Tom Cross)

On Tuesday, South Korea-based LG Chem Ltd. announced that it would invest over $3 billion to construct a battery cathode factory in Tennessee, USA. The facility is part of the company’s efforts to meet the growing demand for American electric vehicle battery components.

LG’s TN-based cathode plant represents one of the most significant EV-related investments made by a South Korean company in the US so far. Under the Inflation Reduction Act’s (IRA) rules, automakers and battery manufacturers who rely heavily on China for sourcing their vehicle components face a cost disadvantage, so locally-established facilities such as LG’s TN plant could become extremely valuable. 

Mass production in LG Chem’s TN cathode factory is expected to begin sometime in the second half of 2025. The facility is also expected to produce about 850 jobs for the state. Overall, the upcoming facility is expected to have the capability to produce 120,000 tonnes of cathode materials annually by 2027. Such a number would be enough to power about 1.2 million electric cars. 

Apart from setting up shop in the United States, LG has noted that it intends to go deeper into its battery business. In order to support its customers better and comply with the requirements of the Inflation Reduction Act, LG Chem noted that it is also pursuing collaboration with mining companies and recycling businesses.  

The upcoming LG Chem facility in TN is expected to produce cathodes for batteries with nickel-cobalt-manganese-aluminum (NCMA) chemistry. Considering that the NCMA battery is expected to be about 90% nickel, automakers that utilize them could reduce their reliance on materials such as cobalt, which is linked to controversial labor practices. 

LG Chem is expected to supply cathode materials to Ultium Cells, a joint venture between American automaker General Motors and LG Energy Solution Ltd (LGES). LGES currently serves as a battery supplier for several key electric vehicle makers, including Tesla Inc., Ford Motor Co., and Hyundai Motor Co, among others. 

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Tesla, GM supplier LG to invest more than $3 billion for battery cathode facility in TN
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