LG has teamed up with General Motors
South Korea’s powerhouse LG Energy Solution will build $2.3 billion battery cell factory in the United States through its joint venture firm with General Motors.
LG Energy Solution said on April 17 that the company and GM would each invest $933.5 million to the joint venture, named Ultium Cells, which will also borrow some $500 million for the facilities.
The 2.8-million-square-foot plant in Spring Hill, Tennessee, will be up and running in late 2023 for a nearby GM assembly line. The joint venture’s first facility in Ohio will be completed next year.
“LG Energy Solution will be able to secure additional electric vehicle battery production capacity in the U.S.,” an LG Energy Solution official said. “We will try to chalk up a fast growth in the market.”
LG Energy Solution announced in March that it plans to invest more than $4.5 billion in U.S. battery facilities over the next four years by building at least two new factories.
LG Energy Solution was spun off from LG Chem, South Korea’s largest chemical company, late last year. The former strives to go public in the near future.
GM also needs battery plant
From the perspective of GM, the Tennessee plant is significant because the U.S. automaker aims to launch 30 electric vehicles by 2025. It also promised to phase out gasoline and diesel products by 2035.
“The addition of our second all-new Ultium battery cell plant in the U.S. with our joint venture partner LG Energy Solution is another major step in our transition to an all-electric future,” GM CEO Mary Barra said in a statement.
“LG Energy Solution has teamed up with GM to target the U.S. market. The two companies’ second factory is significant as the U.S. government continues to stress eco-friendly vehicles,” Prof. Kim Pil-soo at Daelim University said.
Indeed, the White House expressed its strong support for electric cars since new President Joe Biden’s inauguration early this year.