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LG Chem Group’s EV battery plant in Poland to receive 95-million aid from the government

The European Commission approved 95 million euros of Polish aid for the expansion of LG Chem Group’s electric vehicles battery plant.

According to the press statement of the European Commission, the investment aid will support LG Chem’s battery cell production facility in the Polish Dolnośląskie region. The new plant is expected to supply batteries for more than 295,000 EVs each year in the European Economic Area (EEA).

“Our in-depth investigation has confirmed that Poland’s 95 million euros public support to expand the production capacity of an LG Chem’s electric vehicles battery plant is in line with our State aid rules. The aid will contribute to job creation and to the economic development of a disadvantaged region, without unduly distorting competition”, said Executive Vice-President Margrethe Vestager who is in charge of competition policy at the European Commission.

South Korean chemical company LG Chem operates in Poland through its subsidiary LG Energy Solution Wrocław. In 2017, LG Chem decided to invest 1 billion euros to expand its production capacity of lithium-ion cells, battery modules and battery packs for electric vehicles in its existing plant in the Polish Dolnośląskie region.

In 2019, Poland notified the Commission of its plans to grant 95 million euros to support the expansion of the plant and in 2020 the Commission opened an in-depth investigation to assess whether the measure was compatible with the Guidelines on Regional State Aid for 2014-2020.

The Commission’s investigation confirmed that without the 95 million euros of Polish support, LG Chem would have opted to invest outside of the EEA. It also concluded that the positive effects of the project on regional development outweighs any possible distortion of competition brought about by the State aid.

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