POSCO Future M completed a new precursor manufacturing facility in South Korea that sidesteps Chinese suppliers, positioning the company to benefit from Washington’s restrictions on battery materials from Beijing.
The plant in Gwangyang can produce 45,000 tons of precursor materials annually, enough to power about 500,000 electric vehicles. The facility serves Ultium Cells, the joint venture between General Motors and LG Energy Solution, as automakers scramble to qualify for US tax incentives.
The U.S. Inflation Reduction Act disqualifies electric vehicles containing Chinese battery components from receiving up to $7,500 in tax credits, with restrictions tightening further in 2025. The rules have driven growing demand from customers for China-independent supply chains, according to company officials.
The 22,400 square meter facility represents POSCO Future M’s latest effort to capitalize on geopolitical tensions that have reshuffled global battery supply chains. The company has secured alternative sources for raw materials used in precursor production beyond Chinese suppliers.
While the plant opening comes as many other battery projects have been delayed due to sluggish EV demand, POSCO Future M is betting that policy-driven demand will offset broader market headwinds. The company aims to expand precursor production capacity to 460,000 tons by 2030 from current levels.
The facility uses high automation with 10 production lines controlled by about 10 staff members, allowing the company to maintain quality control that executives say was harder to achieve with external suppliers.
