LG Chem cathode material plant becomes IRA compliant after Toyota Tsusho acquires 25% stake

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LG Chem cathode material plant becomes IRA compliant after Toyota Tsusho acquires 25% stake

Published: 09 Sep. 2025, 13:58 Updated: 09 Sep. 2025, 19:20

Audio report: written by reporters, read by AI

A panoramic view of LG Chem's cathode materials plant in Gumi, North Gyeongsang [LG CHEM]

LG Chem announced Tuesday that Toyota Tsusho, part of Japan’s Toyota Group, has acquired a 25 percent stake in its Gumi cathode material plant, becoming the second-largest shareholder as the two companies join forces to expand their presence in the global cathode material market.

The new ownership structure allocates 51 percent to LG Chem and 25 percent to Toyota Tsusho, while China’s Huayou Cobalt’s stake has been reduced from 49 percent to 24 percent.

The change ensures compliance with the U.S. Inflation Reduction Act’s (IRA) “foreign entity of concern” rule, which excludes companies from tax credits if entities from countries such as China hold more than 25 percent of their shares. The provision took effect in July.

Toyota Tsusho, responsible for raw material procurement for Toyota Motor, will supply cathode materials produced at the Gumi plant to battery customers in North America. The plant has an annual production capacity of 66,000 tons.

LG Chem added that it is expanding its customer base through a stable global supply network, with plants in Tennessee scheduled to begin operations in the second half of next year, as well as in Cheongju and Gumi, Korea, and Wuxi, China.

“Toyota Tsusho’s equity participation marks an important turning point for LG Chem in strengthening its competitiveness in cathode material supply while responding to the U.S. IRA regulations,” said LG Chem CEO Shin Hak-cheol. “We will further solidify our position as a global leader in the battery materials market based on world-class products and strong partnerships.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY CHOI SUN-EUL [[email protected]]