[EXCLUSIVE] LG plans factory with GM in Tennessee: Source

[NEWS1]

LG Energy Solution is building a second plant with General Motors (GM) and it will be in Tennessee, a source directly related to the deal told the Korea JoongAng Daily.

The exact location in Tennessee is still under negotiation, the source said, adding that Clarksville and Spring Hill are included on a shortlist but other options are also being considered.

LG Energy Solution declined to confirm the report.

The battery unit of LG Chem recently announced it would build a second plant with GM in the U.S. and promised details of the investment size and location within the first half of the year.

Foreign media had previously speculated it would be built in Tennessee but the company did not confirm it.

Tennessee has prior experience with Korean manufacturers.

Clarksville, in northern Tennessee, has emerged as a prime site.

LG Electronics invested $360 million in Clarksville in 2019 in a washing machine factory, hiring more than 600 people.

Hankook Tire & Technology, the biggest tire maker in Korea and the world’s seventh, opened its first overseas production plant in Clarksville in 2017 with an $800 million initial investment. The combined incentives from the state and city were reported to be worth $72 million.

Spring Hill, a Tennessee city 90 minutes from Clarksville, is another candidate. Last year, GM pledged a $2 billion investment to convert an existing facility to production of electric vehicles. The first EV model from the company's Cadillac division, the Lyriq, will be produced at the Spring Hill plant, according to GM.

“The second plant is likely to be located where circumstances benefit GM more than LG as the battery company is in need of a stable supply deal from GM,” said Park Chul-wan, an automotive engineering professor at Seojeong University.

“In that sense, the area near Spring Hill will have more of a chance.”

LG Energy Solution is strengthening its partnership with GM as the Detroit-based automaker recently said it would launch a total of 30 EV models by 2025 and increase its proportion of EV sales to 40 percent by the same year.

The two companies’ EV battery partnership was initiated in 2019 with a 50-50 joint venture, Ultium Cells. They pledged to invest $2.3 billion in a battery factory in Ohio, which will have a 35 gigawatt-hour capacity once completed.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]