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LG Chem powers into US with second battery factory

(ATF) Automotive giant General Motors and its South Korean partner LG Chem are expected to announce on Friday that they will build a second battery cell manufacturing plant: a $2.3 billion factory in Spring Hill, Tennessee.

The plant will use a different, more cost-effective battery chemistry than the one the companies will offer from the joint-venture plant they are building in Lordstown, Ohio, the sources said on Wednesday.

The technology is expected to be based around GM’s Ultium lithium-ion battery technology developed with LG Chem, and used in the carmaker’s $2 billion Cadillac Lyriq project.

GM would not confirm the details and declined further comment, Reuters repoted, adding that LG Chem did not have an immediate comment.

The factory would provide much-needed domestic production of advanced batteries. China supplied nearly half of US lithium-ion battery imports in the last quarter of 2020 to meet strong demand for electric cars, battery stations and electronics.

FASTER IMPORT RATE

Imports of lithium-ion, or Li-ion, batteries jumped 86% in the last three months of 2020 to 43.7 million kg, growing eight times faster than a year before, according to data from Panjiva, a New York-based trade data consultancy.

China shipped 48% of the imported Li-ion cells and packs in the fourth quarter of 2020, followed by South Korea with 26%. Germany accounted for another 7% and Japan supplied 6%.

For the full year, US Li-ion battery imports rose 84% to 158.5 million kg, up from 29% growth in 2019, Panjiva data show.

LG said last month it planned to invest more than $4.5 billion in US battery production over the next four years, including plans to build at least two new plants.

The South Korean company is on an expansion spree. This month LG Chem bought a 15% stake in Poland Capchem, a maker of electrolytes. While the investment was relatively small – 17 million zlotys ($4.5 million) – Dennis Ip, analyst at Daiwa Capital Markets in Hong Kong, said it underscored LG Chem’s intention to acquire strategic assets across the world.

With reporting by Reuters

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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