LG Energy Solution and General Motors will build a new electric vehicle battery plant in Tennessee, their second in the US, the US automaker’s South Korean unit confirmed Thursday.

The new factory will be similar in scope and scale to their first plant, a $2.3 billion facility currently under construction in Ohio. Set for commercial operation next year, the Ohio plant is designed to churn out enough batteries for 35 gigawatt-hours per year. LG Energy Solution and GM have set up a joint venture called Ultium Cells for the partnership.

“The Tennessee plant is part of GM’s efforts to phase out internal combustion engine vehicles by 2035. GM and its brands including Cadillac, GMC and Chevrolet will introduce new EV lineups based on the new Ultium platform,” a senior GM Korea official said.

According to LG Energy Solution, the Tennessee plant will manufacture “next-generation batteries applied with cutting-edge technologies” starting in 2023. The next-generation batteries will be based on nickel, cobalt manganese and aluminum but will be more advanced than the NCMA batteries from Ohio, which will contain 89-90 percent nickel.

LG Energy Solution, a leading maker of lithium-ion batteries for EVs, supplies to major carmakers including Tesla.

Apart from its partnership with GM, the firm plans to invest more than 5 trillion won ($4.47 billion) on its own and build at least two new plants in the US, establishing an independent capacity to manufacture enough batteries by 2025 to generate 70 gigawatt-hours. Combined with its Michigan factory, the plan would push LG Energy Solution’s annual production capacity in the US alone to 75 gigawatt-hours.

The Korean battery maker has already secured 40 percent of the 5 trillion won investment, after it settled a trade secret dispute with rival SK Innovation last week for 2 trillion won. SK Innovation will pay 1 trillion won in cash and the rest in royalties for LG Energy Solution’s technologies.

According to Hyundai Motor Securities analyst Kang Dong-jin, Korean battery firms are considering setting up or expanding a production base in the US in response to the US’ reshoring goals.

Under the United States-Mexico-Canada Agreement, which took effect this year, automakers will have to certify by 2023 that 75 percent of their components are made in one of the three countries to avoid tariffs in the region. Batteries account for more than 40 percent of the total cost of an EV.

Samsung SDI, which runs a battery pack production facility in Michigan, is also considering the US as one potential location for its planned battery cell production plant.

By Kim Byung-wook (kbw@heraldcorp.com)