LG Chem to build $3.2 billion plant in Clarksville to supply material for EV batteries

CLARKSVILLE, TN (CLARKSVILLE NOW) – LG Chem announced today it will build a $3.2 billion cathode manufacturing plant in Clarksville, creating 860 new jobs, with about 200 of those paying more than $100,000 per year.

It’s the largest announced foreign direct investment in Tennessee’s history.

The plant, which will create a key component for electric vehicle batteries, will be the largest of its kind in the United States, covering 420 acres with a production target of 120,000 tons of cathode material annually by 2027, according to the announcement made by LG Chem, a South Korea-based company.

LG Chem graphic showing location of the new plant. (LG Chem)

That’s enough cathode material per year to power batteries in 1.2 million pure electric vehicles (EV) with a range of 310 miles per charge. Construction of the plant will begin in the first quarter of 2023, with mass production to start in the second half of 2025.

“LG Chem’s decision to invest $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,” Gov. Bill Lee said in the announcement. “I thank this company for creating more than 850 new jobs to provide opportunity to Tennesseans across Montgomery County.”

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At $3.2 billion, the LG Chem investment is almost three times that of Hemlock Semiconductor‘s $1.2 billion, announced in 2008.

This will be the third EV battery sector factory for Clarksville announced in recent years, with the previous announcements from Microvast of its two EV battery plants in development.

“Montgomery County, Tennessee is poised and ready for the electric vehicle industry,” said County Mayor Wes Golden. “This is the largest investment ever made in Montgomery County and we embrace this opportunity. Thank you to those who worked so hard in the forefront and behind the scenes to make this a reality for Middle Tennessee and our community. Bringing LG Chem has been an intentional effort on the part of the state and local economic development councils to bring high-quality employment to Montgomery County.”

High number of high-paying jobs

The plant will create 860 jobs, with starting pay at $24 an hour, according to Clarksville-Montgomery County Economic Development Council officials. About 200 of those jobs will pay over $100,000 per year, the EDC told Clarksville Now.

The jobs will include production positions, plus roles in office/administration and management, the EDC said.

“This project is transformative for our community!” said Shea Hopkins, vice president of Industrial Development, Clarksville-Montgomery County EDC. “It brings a large number of high-skill and high-wage jobs to our area. The IDB is also especially pleased that LG Chem is committed to shaping the future of the Middle Tennessee region by investing in diversity, equity, inclusion and meaningful community engagement.”

The salary ranges will be particularly helpful for soldiers transitioning out of Fort Campbell and looking for higher-wage positions.

“On behalf of the EDC, I am happy to share that the positions LG Chem brings with this project announcement will increase wage opportunities for our community. This project will add diverse skill sets and advanced manufacturing roles to the local workforce while providing an exciting career option for transitioning military looking for a competitive wage,” said Buck Dellinger, CEO of the local EDC.

Ideal site for operations

Company officials held a signing ceremony this afternoon in Nashville with Lee, Department of Economic and Community Development Commissioner Stuart McWhorter and LG Chem CEO Shin Hak-Cheol, among others.

“We are grateful that LG Chem will expand their investment in Clarksville, providing an historic level of capital investment along with hundreds of new, high-paying jobs for families in our growing community,” Clarksville Mayor Joe Pitts said. “This announcement is more good news for our community, and further proves Clarksville-Montgomery County is on the right track in our economic development efforts.”

For LG Chem, Tennessee was the best choice due to its proximity to key customers, ease of transporting raw materials – the site is bordered by a rail line and is just a couple or miles from Interstate 24 – and active cooperation from state and local governments .

“In addition to the benefits realized by investing in manufacturing on US soil, LG Chem envisions the Tennessee site being the supply chain hub where material and recycling partners work together to supply global customers,” the company announcement said.

Cathode material for electric vehicle (EV) batteries. (Contributed, LG Chem)

What they will do

The new facility will produce advanced cathode materials containing nickel, cobalt, manganese and aluminum (NCMA) for next-generation EV batteries with improved battery capacity and stability. NCMA cathode materials are among the most critical ingredients for determining the battery capacity and life of electric vehicles.

“The new facility will be designed with the environment and future needs of clean energy in mind. LG Chem will collaborate with power suppliers in Tennessee to respond to the demands of customers, including battery and electric vehicle manufacturers, for more renewable energy sources,” the announcement said. “Operation of the new facility will rely completely on renewable energy provided by solar and hydroelectric power.”

LG Chem and LG Electronics are both part of LG Corporation. LG Electronics announced its Clarksville plant in 2017, a $360 million smart factory producing front- and top-load washing machines. That facility now employs about 1,000 workers.

A view of the 420-acre Allensworth Farm, bounded by Charles Bell Road on the south, Hampton Station Road on the east and railroad tracks on the northwest. (Contributed)

About the site

For several weeks, companies have been actively recruited to the 420-acre Allensworth Farm property in Montgomery County just east of Exit 4 of Interstate 24. The property is roughly bounded by Charles Bell Road on the south, Hampton Station Road on the east and railroad tracks on the northwest.

The Clarksville-Montgomery County Industrial Development Board exercised its option on the property in May 2019. The property was then purchased by Montgomery County last year for $18 million.

Making way for the LG Chem prospect took some adjustments. The company’s operations require a structure up to 200 feet tall, which is 100 feet above the height allowed under M-2 industrial zoning in Montgomery County. Workers would operate at a maximum “habitable height” of 140 feet. The variance to local zoning was approved on Nov. 10, according to Rod Streeter at Montgomery County Building and Codes.

Investment in Clarksville

Clarksville has several large industrial projects recently announced or under construction, two of them in the EV battery sector. These include:

“An investment like this is a game-changer we don’t take for granted,” Golden said. “We will work to build lasting relationships with LG Chem and help them be successful partners within the community. Montgomery County is rich in history with a bright future ahead.”

Jake Foster contributed to this report.

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