LG Chem is Investing $3.2 Billion to Build a Cathode Manufacturing Facility for Electric Vehicle Batteries in Tennessee

author: Eric Walz   

A rendering of LG Chem's cathode manufacturing facility to be built in Clarksville, Tennessee.

Electric vehicle battery manufacturer LG Chem announced the signing of a memorandum of understanding (MOU) with the state of Tennessee to establish a new cathode manufacturing facility for electric vehicle (EV) batteries in the city of Clarksville. 

The new plant in Clarksville will be the largest of its kind in the U.S. with a production target of 120,000 tons of cathode material annually by 2027. LG Chem will invest more than $3 billion in the factory which will produce enough cathode materials to power 1.2 million EVs once fully operational.

Construction of the plant will begin in the first quarter of next year with mass production of cathode materials to start in the second half of 2025. 

The signing ceremony was attended by Tennessee Governor Bill Lee and LG Chem CEO Shin Hak-Cheol, along with other state officials.

The construction of the factory in Tennessee is part of LG Chem's strategy to increase its EV battery materials business fourfold from KRW 5 trillion (US$3.68 billion) in 2022 to KRW 20 (US$14.75 billion) trillion by 2027.

LG Chem also supplies General Motors and Lucid Group with EV batteries.

"The new cathode manufacturing facility in Tennessee brings us one step closer to becoming the world's best battery materials manufacturer and fulfilling our corporate vision to become a top global science company," said CEO Shin of LG Chem. "This site will be the North American manufacturing center of excellence for the cathode supply chain and lead to the creation of many well-paying jobs, contributing to the local economy in Clarksville."

LG Chem said the state of Tennessee was selected due to its proximity to key customers, the ability to transport raw materials, as well as the cooperation of the state and local governments. 

"This is a big win for Tennessee and Montgomery County, said Stuart McWhorter, commissioner of the Tennessee Department of Economic and Community Development. "LG Chem's decision to locate its new cathode manufacturing facility in Clarksville underscores Tennessee's growing profile as a hub for U.S. and global companies. As we continue our efforts to attract companies in the automotive industry, we are focused on supporting companies that boost Tennessee's presence in the EV space."

The Tennessee plant will feature LG Chem's most advanced production technology including the ability to produce more than 10,000 tons of cathode material per line, the industry's highest output, according to LG Chem. The company has successfully tested its advanced production technology at its fourth global cathode manufacturing site in Cheongju, South Korea.

LG Chem plans to implement its smart factory technology in Tennessee that will automate the entire NCMA cathode production process. The company will establish a quality analysis and control system that it says "will be the benchmark for all other cathode plants in the world." 

The new facility will be designed with the environment and future needs of clean energy in mind. Operation of the plant will rely completely on renewable energy generated by solar and hydroelectric power. 

"LG Chem's decision to invest USD 3.2 billion in Clarksville is a testament to Tennessee's unmatched business climate, skilled workforce and position as a leader in the automotive industry," said Tennessee Governor Lee. "I thank this company for creating more than 850 new jobs to provide opportunity to Tennesseans across Montgomery County."

LG Chem aims for the Tennessee site to become a major supply chain hub where material and recycling partners work together to supply global automotive industry customers. 

With the new LG Chem cathode manufacturing facility, the state of Tennessee is becoming a hub for electric vehicle and battery production.

In May 2021, Ultium Cells LLC, the joint venture of LG Energy Solution and GM, announced a $2.3 billion investment to build a second EV battery cell manufacturing plant in Spring Hill, Tennessee, where the automaker has had a presence since 1990 when it opened its Spring Hill Manufacturing plant. 

The Ultium Cells facility will also produce advanced NCMA cathode materials containing nickel, cobalt, manganese and aluminum for next-generation EV batteries with improved battery capacity and stability. 

In July, Volkswagen announced it started production of the ID.4 electric SUV at its revamped factory in Chattanooga, Tennessee. The factory is the automaker's North American center for electric vehicle production. Volkswagen began expanding its Tennessee assembly plant in 2020 to produce electric vehicles. 

The plant includes a state-of-the-art high-voltage laboratory designed to develop and test electric vehicle cells and battery packs for electric VW models assembled in the U.S. The Chattanooga assembly plant also includes production lines for both battery cells and packs.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.