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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Seoul – Toyota Tsusho has become the second-largest shareholder of LG Chem’s Gumi cathode materials plant (LG-HY BCM) after purchasing a 25% stake from China’s Huayou Cobalt, LG Chem announced on September 9. Cathodes are a key material in electric vehicle (EV) batteries.
Following the transaction, the ownership structure of the Gumi cathode plant has been adjusted as follows:
LG Chem: 51%
Toyota Tsusho: 25%
Huayou Cobalt: 24%
IRA Compliance Through Ownership Restructuring
The restructuring allows LG Chem’s Gumi plant to comply with the U.S. Inflation Reduction Act (IRA). Under the IRA, if a “foreign entity of concern” such as a Chinese company holds 25% or more in a battery supply chain entity, the facility is disqualified from U.S. EV tax credits.
Previously, Huayou Cobalt’s 49% stake made the Gumi plant ineligible. With its stake reduced to 24%, the plant is no longer classified as a Prohibited Foreign Entity (PFE), thereby securing eligibility for U.S. incentives.
Strategic Outlook
Toyota Tsusho is expected to leverage its new stake by supplying cathode materials produced in Gumi to battery customers in North America, strengthening the Korea–Japan collaboration in the EV supply chain.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
