LGES, which supplies batteries to Tesla Inc., Ford Motor Co. and Hyundai Motor Co. among others, last month raised its 2022 revenue outlook to 25 trillion won ($18.4 billion) from 22 trillion, citing new projects from automakers.
LG Chem’s new plant will make cathodes for batteries with a nickel, cobalt, manganese and aluminum (NCMA) chemistry. The NCMA battery, which is about 90 percent nickel, allows manufacturers to reduce their reliance on expensive cobalt, and reduce their exposure to refining and processing in China.
China currently has 75 percent of the world’s cobalt refining capacity and 50 percent of the lithium processing capacity, according to Benchmark Mineral Intelligence.
GM has said it will use NCMA battery cathodes from LG Chem for a range of EVs using Ultium-branded batteries.
The Inflation Reduction Act will, among other measures, require from next year that at least 40 percent of the monetary value of critical minerals for batteries be from the U.S. or an American free-trade partner in order to qualify for U.S. tax credits. That share will rise to 80 percent in 2027.
Automakers such as Hyundai and sister automaker Kia have been hit hard by the new law, which immediately ended credits for about 70 percent of the 72 car models that were previously eligible for EV subsidies.
At this month’s G20 summit, South Korean President Yoon Suk-yeol asked U.S. President Joe Biden to prevent discriminatory measures against South Korean companies, his office said.
It added Biden had replied that the implementation of the law should account for the contribution of South Korean investment in the U.S. economy.
