Supply Chain Matters highlights an additional strategic sourcing announcement involving the future production of electric powered autos and vehicles in North America.



South Korea based LG Chem announced this week a planned $3.2 billion investment to construct and operate a high-volume battery cathode components production facility.

According to a report published by Nikkei Asia (Paid subscription or metered view), the chemical and electronics provider signed a memorandum of understanding with the State of Tennessee involving a 420 acre facility to be located in Clarksville, Tennessee.

The facility reportedly will supply battery component needs for U.S. based EV automotive production needs for Hyundai Motors and Ultium Cells, a joint venture involving LG Solutions and General Motors.


Industry Supply Network Implications

In prior Supply Chain Matters updates, we have called reader attention to General Motors efforts to lock-in supply needs up to 2025, battery designer and supplier Panasonic’s announcement for an augmented U.S. production presence, along with other related moves from General Motors and Rivian Automotive.

Under new U.S. legislation related to combating climate change, consumers can garner considerable dollar incentives, amounting to over $7000, in purchasing electric-powered vehicles where both the supply network and final assembly are located domestically.

With each of these announcements, the multiple tiers of EV related components, and soon raw materials, continues to evolve. The overall incentive is EV auto and vehicle demand that could be considerable over the next decade as stricter environmental emissions restrictions evolve in the U.S. and other global regions.

A further benefit is the domestic sourcing of major components in EV vehicle supply networks, providing overall transportation and time savings in needs to transport components and finished vehicles. That further adds to fulfilling U.S. based automaker’s ESG objectives.


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