A company in the electric vehicle supply chain that's making one of the biggest-ever single investments in Southeast Tennessee has won a $75-million commitment from a battery component producer.
Piedmont Lithium, which is planning a $600-million plant in McMinn County to make lithium hydroxide for use in batteries, has received a $75-million investment from South Korea's LG Chem, according to the companies.
Also, Piedmont has agreed to supply LG Chem with 200,000 metric tons of spodumene concentrate, a source of lithium for batteries, over four years.
Chattanooga is sitting amid more than $30 billion of new or planned investments in electric vehicles by auto companies and battery makers in Tennessee and Georgia alone. The companies are making big bets in the future of electric vehicles.
Piedmont President and Chief Executive Keith Phillips said in a phone interview late last year that he hoped to start construction of the plant this summer in McMinn County with the aim of production beginning in 2025. The Etowah plant is slated to employ about 120 people initially, he said.
The North Carolina-based company looked at seven states in the Southeast before deciding on the Etowah site, Phillips said.
"The location is good," he said. "We want to be close to infrastructure, rail, I-75, customers, car companies and battery plants."
LG Chem in November revealed plans to build a $3.2-billion cathode manufacturing plant in Clarksville, Tennessee, and create 860 new jobs. The dollar figure is the largest announced foreign direct investment in Tennessee's history, according to the state.
The plant that will make the battery component is slated to be the largest of its kind in the United States and cover 420 acres with a production target of 120,000 tons of cathode material annually by 2027, according to the company.
Piedmont late last year was selected for a $141.7-million U.S. Department of Energy grant. Phillips said then that the funds would help accelerate the Etowah project.
He said a challenge is raising capital for the factory, and the grant "helps take the risk off the table."
Michele Krebs, executive analyst for Cox Automotive, said in a phone interview Wednesday that the Inflation Reduction Act passed by Congress last year includes tax credits for electric vehicles, though certain amounts of domestic production is required from automakers.
Minerals eventually have to be from American sources or free-trade partners, she said.
Krebs said that car companies are "making deals left and right" with companies.
In Chattanooga, Australian-based Novonix, the maker of synthetic graphite used in lithium-ion batteries, plans to eventually invest about $160 million and employ 300 workers at the former Alstom turbine-manufacturing plant on Riverfront Parkway.
Novonix also is looking at building another plant to produce 30,000 tons of synthetic graphite and employ 1,000 more workers. To aid that effort, Novonix in November won approval for $150 million in project funding from the Department of Energy.
Joda Thongnopnua, chief of staff for Chattanooga Mayor Tim Kelly, said late last year during a tour of the Riverfront Parkway plant that "we're fighting hard" for the second Novonix factory.