EU approves €95m Polish aid for LG Chem’s EV battery plant expansion

The new plant is expected to supply batteries for more than 295,000 EVs every year in the European Economic Area

The European Commission has approved €95 million (£79.5m) of Polish aid for the expansion of LG Chem’s battery cell production facility for electric vehicles (EVs).

LG Chem is a South Korean chemical company operating in Poland through its subsidiary LG Energy Solution Wroclaw.

In 2017, the company decided to invest €1 billion (£0.8bn) to expand its production capacity of lithium-ion cells, battery modules and battery packs for EVs at its existing plant in the Polish Dolnośląskie region.

The new plant is expected to supply batteries for more than 295,000 EVs every year in the European Economic Area.

The Commission launched an investigation into Poland’s state aid for LG Chem’s expansion plans in 2020 and found the positive effects of the project on regional development “clearly outweigh any possible distortion of competition” brought by the state aid.

Executive Vice President Margrethe Vestager, in charge of competition policy said: “Our in-depth investigation has confirmed that Poland’s €95 million 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.”

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