General Motors and South Korea’s LG Chem will make investments greater than $2.3 billion in a second U.S. battery cell plant for electrical automobiles in Tennessee, the businesses introduced Friday.

The plant for his or her Ultium Cells LLC three way partnership will likely be to assist manufacturing of GM’s upcoming Cadillac Lyriq crossover and different future EVs at a close-by meeting plant.

The provision and manufacturing of battery cells are crucial for automakers pivoting to electrical automobiles. The three way partnership for the brand new plant whereas its first continues to be underneath development in Lordstown, Ohio, underscores that.

Building on the roughly 2.8 million-square-foot facility will start instantly. The plant is scheduled to open in late 2023 and can create 1,300 jobs, the businesses stated.

“The addition of our second all-new Ultium battery cell plant within the U.S. with our three way partnership accomplice LG Power Resolution is one other main step in our transition to an all-electric future,” GM CEO Mary Barra stated in a launch.

The announcement comes amid a 100-day review ordered by President Joe Biden of the U.S. provide chain for superior batteries, prescription drugs, vital minerals and semiconductors. He ordered the evaluate amid an ongoing international scarcity of semiconductor chips that has considerably impacted U.S. auto manufacturing in 2021.

GM confirmed final month that it was evaluating a second location within the U.S. to supply battery cells for electrical automobiles with LG. Reuters reported particulars of the announcement Wednesday.

LG Power Resolution President and CEO Jong Hyun Kim stated the brand new facility will enable the businesses “to construct stable and steady U.S.-based provide chains that allow every part from analysis, product growth and manufacturing to the procurement of uncooked parts.”

Some analysts, particularly Morgan Stanley’s Adam Jonas, have warned of a possible scarcity as a result of cell capability in contrast with the quantity of recent EVs anticipated to return to market in coming years.

“In our opinion, GM’s formation of Ultium/Ultium Cells LLC will show to be a vital level of strategic differentiation that may finally drive worth creation for shareholders,” he stated Wednesday in a notice to traders.

Ultium is GM’s next-generation batteries and platform, that are anticipated to debut this 12 months within the GMC Hummer EV pickup. The primary automobiles usually are not anticipated to incorporate Ultium battery cells from the Ohio plant that is underneath development.

GM is predicted to proceed to construct or convert vegetation to battery services within the U.S. because it strikes to develop into an automaker that completely presents electrical automobiles by 2035. That features at the least 30 new EVs by 2025 under a $27 billion funding plant in electrical and autonomous automobiles throughout that timeframe.

Most batteries, like semiconductors, are manufactured in Asia and Europe. Tesla operates a large battery and cell manufacturing facility with Panasonic in Nevada. Tesla additionally informed traders in September that it began producing its personal cells at a pilot plant in Fremont, California.

GM and LG first introduced the three way partnership in December 2019.