LG Chemical Polish Battery Plant expansion faces EU investigation

SMM: according to reports, Poland announced plans to provide 95 million EUR (about $112 million) of aid to LG Chemical to help the company expand its Polish electric vehicle battery factory. EU national aid regulators have announced that they have opened an investigation into the Polish plan, and EU officials suspect that Poland's move may not comply with EU rules.

In 2017, LG Chemical said it would invest more than 1 billion EUR to increase production capacity in Poland. Subsequently, Poland announced that it would provide 95 million euros in aid to the company and sought approval from the European Commission for this purpose. The EU competition regulator has raised some questions about Poland's support for LG Chemical, in particular whether the country has provided incentives for the expansion of the LG chemical plant and whether its level of assistance may have exceeded the allowable level.

EU antitrust chief Margrethe Vestager said that EU national aid rules enable member states to promote economic growth in poor areas, but the EU needs to ensure that aid is used where it is really needed to attract private investment and prevent the recipient from gaining an unfair advantage over competitors at the expense of taxpayers.

According to the European Investment Bank, which supports the project, the investment will increase the annual production capacity of the LG Chemical Poland plant to about 65 gigawatt hours, making the Polish plant one of the largest lithium cell production plants in the world. The plant in (Wroclaw), Wroclaw, Poland, will create more than 1800 jobs and will have more than 6000 full-time employees by the end of 2022.

LG Chemical is a major supplier of electric vehicle batteries, and its customers include GM, Ford, Renault, Volvo, Audi, Volkswagen and Daimler. In addition, Hyundai Motor, South Korea's largest carmaker, and its sister company, Kia, are also customers of LG Chemical.

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