LG·GM "US Tennessee Plant to Operate in 2025... Supplying 1 Million Units in 2024"

Billy, Governor of Tennessee, USA (from left), Kim Jong-hyun, President of LG Energy Solution, and Mary Barra, Chairwoman of GM, are posing for a commemorative photo at the investment announcement event held at the Tennessee State Museum on the 16th (local time).

[Asia Economy Reporter Choi Dae-yeol] LG Energy Solution and General Motors (GM) announced on the 16th (local time) that they will build an electric vehicle battery factory in Spring Hill, Tennessee. LG Energy Solution President Kim Jong-hyun, GM Chairwoman Mary Barra, Tennessee Governor Bill Lee, and executives from both companies and local officials held an investment announcement event to finalize the specific investment scale and plans.

LG and GM will invest a total of 2.7 trillion KRW in Ultium Cells, a joint venture established for electric vehicle battery production, securing a production capacity of over 35 GWh. Construction is set to begin within the year, aiming for mass production in the second half of 2023. GM operates a vehicle assembly plant in Spring Hill, where the purely electric crossover utility vehicle (CUV) Lyriq is manufactured.

Together with the Ohio Rose Town plant (35 GWh), which began construction earlier and is expected to start operations next year, the batteries will be supplied to GM's next-generation electric vehicles. By 2024, when both joint venture plants are fully operational, the battery production capacity will reach 70 GWh. This amount is sufficient to produce one million high-performance pure electric vehicles capable of driving over 500 km on a single charge.

Chairwoman Barra said, "Building a second battery plant in the U.S. with our joint partner LG Energy Solution is another major step in our transition to an electric vehicle future."

President Kim Jong-hyun stated, "We will actively expand electric vehicles with GM and significantly contribute to the success of the U.S. Green New Deal policy. We will establish a differentiated and stable supply chain system within the U.S., covering not only production but also research and development, product development, and raw material procurement."

Kim Jong-hyun, President of LG Energy Solution, is speaking at an investment announcement event on the 16th (local time).

The U.S. is considered one of the world's top three electric vehicle markets alongside China and Europe. The industry expects sales to increase to 1.1 million units this year and 2.5 million units by 2023. The Biden administration has also actively invested by promoting eco-friendly policies like the Green New Deal. It has clearly stated plans to replace government and school vehicles with electric vehicles, increase subsidies, and expand charging stations. As part of reshoring policies, a punitive 10% tariff will be imposed on electric vehicles not made in the U.S., meaning batteries must be locally produced.

GM, the leading automaker in the U.S., is also focusing on electrification by planning to launch about 30 electric vehicle models worldwide by 2025. It has increased its investment in electrification and autonomous driving from $20 billion to $27 billion, aiming to become the top electric vehicle company domestically by 2025.

In addition to this joint venture plant, LG plans to invest over 5 trillion KRW separately to establish a battery production capacity of more than 70 GWh locally. Together with the Michigan plant (5 GWh) operating since 2012, the local production capacity will reach 75 GWh. Including the joint venture, the capacity will increase to about 145 GWh by 2025. LG's global battery plant production capacity currently stands at 120 GWh, and the company plans to secure 260 GWh by 2023. This volume is sufficient to produce more than 3.7 million high-performance pure electric vehicles.

The first joint factory of Ultium Cells, a joint venture between LG and GM, being built in Rose Town, Ohio, USA. It is scheduled to start operations next year.