LG·GM Second Joint Venture Plant in Tennessee, USA... Battery Hub Amid Central Region Dense with Car Factories

Near GM Complete Vehicle Plant Springhill
Also Close to Volkswagen and Ford Plants

[Asia Economy Reporters Byunghee Park, Daeyeol Choi] LG Energy Solution and American automaker General Motors (GM) have decided to build a second electric vehicle battery factory together in Spring Hill, Tennessee, according to major foreign media reports on the 14th (local time). Ultium Cells, a joint venture established by LG and GM to supply local EV batteries, is currently building its first factory in Lordstown, Ohio. With production bases established not only in the northeastern U.S. but also in the central region where automakers are concentrated, they are expected to accelerate their local market penetration.

According to foreign media and LG Energy Solution, the new Spring Hill factory will receive an investment of $2.3 billion, which is more than the $2 billion spent on building the first factory (Lordstown). Construction is scheduled to begin next year. Although the exact completion date is unknown, considering that it usually takes about three years from factory construction to mass production of finished products, battery supply is expected to be possible around 2025. The two companies plan to announce specific details such as the site and investment scale of the second EV battery factory in Tennessee on the 16th.

The batteries produced at the Spring Hill factory will be used in the Lyriq, a crossover utility vehicle (CUV) electric car unveiled by GM last year. The Lyriq is a model built on an EV-dedicated platform and aims for mass production next year. GM has an automobile factory in Spring Hill, currently producing SUVs such as the Cadillac XT5. GM has decided to invest $2 billion to convert this factory into an EV production plant, including for the Lyriq.

GM's crossover utility vehicle Lyriq unveiled last year

$2.3 Billion Investment, Construction to Begin Next Year
Likely Similar in Scale to Lordstown First Factory

LG Energy Solution and GM decided on the second factory even before completing the first because their interests aligned. GM announced its transition to an EV manufacturer, planning to stop production and sales of internal combustion engine vehicles by 2035. Batteries are a core component of EVs, and aside from LG Energy Solution, SK Innovation, and Japan’s Panasonic, there are no major battery companies in the U.S. This second joint venture factory is also not far from local automaker plants such as GM’s Kentucky plant, Ford, Volkswagen, BMW, Mercedes-Benz, Hyundai, and Kia.

LG Energy Solution, which has emerged as the world’s number one EV battery maker excluding China, is also in urgent need of additional factories to expand supply in the U.S. LG Energy Solution’s Holland plant in Michigan, which began operations in 2012, has an annual production capacity of 5 GWh, enough for about 70,000 EVs. Last month, LG Energy Solution announced plans to invest more than 5 trillion won (approximately $4.5 billion) by 2025 to build two to three additional factories in the U.S. This investment is separate from Ultium Cells’ factories. If carried out as planned, battery production capacity will increase to 75 GWh, nearly 15 times the current level.

Exterior view of the joint factory LG and GM are building in Rose Town, Ohio, USA

The cooperation between LG Energy Solution and GM has grown stronger since 2009. Developing dedicated batteries for GM EVs and establishing a reliable supply system through a joint venture between the two companies are part of this effort. A local U.S. media outlet reported that rumors about GM and LG Energy Solution’s second battery factory have been circulating since early last month, with speculation that a third factory might be built in Texas.

This move aligns with the policy direction of the Joe Biden administration. President Biden unveiled a $2.25 trillion infrastructure bill on the 31st of last month, which includes an investment of $174 billion for the EV ecosystem.