Tennessee landed another piece of the burgeoning electric vehicle industry as companies in the state and nationwide seek to blunt China’s dominance in resources for batteries that power the vehicles.
Piedmont Lithium, based in Belmont, North Carolina, a suburb of Charlotte, announced that it will invest nearly $600 million in a plant in Etowah, Tennessee, in a new industrial park about 60 miles northeast of Chattanooga to make lithium hydroxide, a key raw material to make cathodes used in electric vehicle batteries. The plant will employ 120 people when it begins operation in 2025.
Other electric vehicle makers and suppliers have moved into the area. Australian lithium battery component maker Novonix Group announced last November that it would build out an operation in the 400,000-square-foot building known locally as “big blue” a short distance from downtown Chattanooga. General Electric once owned the building and made nuclear turbines there. Novonix will make synthetic graphite for electric vehicle batteries.
Volkswagen is building electric vehicles at its plant in Chattanooga, powered with batteries made by SK Innovation's new plant in Commerce, Georgia. Toyota is building its first battery plant in North America outside Greensboro, North Carolina. And Ford is building a plant in west Tennessee for both batteries and vehicles.
Volkswagen said in June it was looking to build battery plants in the U.S. as well as additional assembly plants. Honda in partnership with LG recently announced plans to build a battery plant somewhere in the U.S. with strong indications that it will end up in Ohio near Honda’s assembly plant in Maryville, about 45 miles northwest of Columbus.
“The rapid electrification of the automotive market has led to massive investments in electric vehicle and lithium-ion battery production in the United States, creating a critical need for lithium hydroxide produced in the U.S.,” Keith Phillips, Piedmont Lithium’s CEO, said in a statement.
Erin Sanders, Piedmont Lithium’s spokeswoman, told CoStar News that in all there is $33 billion committed to building battery plants in the U.S., which will need 500,000 tons of lithium hydroxide annually. That’s significantly higher than the 15,000 tons produced domestically now, Sanders said.
China produces much of the raw materials used in making batteries, which has prompted concerns in the U.S. that a near monopoly would cause economic harm. "It's imperative to our national security and economic growth that the United States have a robust domestic critical mineral supply chain," Republican North Carolina Sen. Thom Tillis said in a statement last year when several senators introduced legislation to speed up federal permitting for mineral production.
The Inflation Reduction Act includes steps to help encourage domestic sourcing of raw materials, particularly on processing minerals sourced from free trade agreement countries. Consumers buying an electric vehicle can receive a $7,500 tax credit if it’s made in North America and if critical minerals aren’t sourced from a “foreign entity of concern,” notably China and Russia.
Piedmont Lithium’s new plant will process spodumene ore that will be mined in Quebec and Ghana in West Africa — not in what is called the Carolina Tin-Spodumene Belt that stretches through mostly western North Carolina, Sanders said. Canada has a free trade agreement and Ghana has trade agreements with the U.S.
Spodumene ore is a source of lithium. The North Carolina area was discovered in the 1950s when lithium was used to make atomic bombs.
Piedmont Lithium was founded six years ago by Australian financier Taso Arima and Lamont Leatherman, a U.S. geologist who had been prospecting lithium in Gaston County, North Carolina. The company moved its headquarters to the U.S. last year and recently opened its new headquarters in downtown Belmont.
The company plans to build a separate processing plant in Cherryville, North Carolina, near where it is in the process of getting permits to open a mine along the spodumene belt. The plant, which will be near a replica of the Tennessee plant, is expected to become operational in 2026.
Charlotte-based Albemarle Corp. is trying to restart an old lithium mine in Kings Mountain along the belt and announced in June it plans to build a lithium processing plant in the area. Philadelphia-based Livent Corp., a spinoff from chemical company FMC Corp., has been processing lithium at its plant in Bessemer City since the 1950s.