LG·GM Joint Venture Selected for Ohio and Tennessee
Battery Logistics Efficiency Up Near EV Production Plants
SK Additional Joint Plant and Samsung New Plant to Be Confirmed Soon
Incentives for Accessibility and New Demand Like ESS Expected Considered
[Asia Economy Reporter Choi Dae-yeol] The factories of LG Energy Solution and the electric vehicle battery joint venture Ultium Cells with General Motors (GM) are planned to be located in Rose Town, Ohio, and Spring Hill, Tennessee. The Ohio factory, where final construction is underway, is adjacent to Rose Town Motors, an electric pickup truck startup named after the local area. It is not far by car, about 3 to 4 hours, from Detroit, Michigan, where many complete vehicle plants including GM's Factory Zero plant are concentrated.
Near the Ultium Cells Tennessee plant, decided in April, there is a GM complete vehicle plant. The Spring Hill GM plant currently mainly produces sport utility vehicles (SUVs), but from next year it is set to produce electric vehicle models. It is expected to receive batteries supplied from the Ultium Cells plant to be operated in the future. Separately from this joint plant, LG has decided to build at least two more factories in the United States to operate independently. GM also announced plans earlier this month to build two more battery plants, but it is not known whether this is with LG’s plants in mind.
The complete vehicle manufacturing process, which assembles numerous parts into a final product, benefits from increased accessibility between complete vehicle plants and parts suppliers, meaning it is advantageous for them to be located close to each other. This improves logistics efficiency. The industry expects electric vehicles, which will become more widespread in the future, to be similar in this regard. This is because the volume and weight of batteries, considered a core component of electric vehicles, are significant. Typically, the battery weight of a mid-sized sedan electric vehicle is known to be in the mid-400 kg range.
The factory in Georgia, USA, targeted by SK Innovation, along with neighboring states, is expected to host or have electric vehicle production lines of many complete vehicle plants. These include Hyundai’s Alabama plant, a leading electric vehicle production base in the US, as well as plants of Kia, Volkswagen, BMW, and Daimler, all within a 4-hour drive. BlueOvalSK, the battery joint venture between SK and Ford, is set to decide on the joint plant site soon, with the current leading candidates being Georgia, where SK’s battery plant is located, as well as Ohio, Tennessee, and Texas.
Except for Texas, these areas already have or are developing related industrial ecosystems including complete vehicle plants and battery material and raw material companies. Georgia, which attracted the SK battery plant, is actively working to attract related companies, anticipating an expansion in electric vehicle adoption. Local media reported that Rivian, an electric vehicle company supplied with battery cells from Samsung SDI, is also discussing plans to build an additional plant in Georgia.
With the Biden administration taking office, the federal government has decided to actively invest in electric vehicle plants and infrastructure, prompting state governments to fiercely compete to attract companies. Samsung SDI, which has confirmed its entry into the US market, has identified the Bloomington-Normal area in Illinois as one of its factory candidate sites, reportedly considering accessibility to nearby complete vehicle plants and state-level incentives comprehensively.
Additionally, as demand for energy storage systems (ESS) increases in the US, there is a possibility of locating factories in the western region, where complete vehicle plants or battery ecosystems are less developed. LG and Samsung produce and supply ESS batteries, and SK Innovation has also officially declared its intention to enter the ESS business. Since household demand is expected to be significant in areas like California and Texas, there is a possibility that locations unrelated to complete vehicle plant sites may be chosen.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
