(Bloomberg) -- LG Chem Ltd. sees the fundamental framework of Joe Biden’s signature climate law remaining unchanged even if Donald Trump returns to the White House, the South Korean battery materials supplier’s chief executive officer said. 

“Fundamentally the spirit of the IRA and the framework of the IRA will not change because what he’s looking for is to use more local production in the US,” LG Chem’s Shin Hak Cheol said in an interview with Bloomberg Television, referring to Biden’s Inflation Reduction Act. “There may be some slight changes here and there, and that may be inevitable in the midst of an administrative change.”  

South Korean battery companies have been investing billions of dollars in the US to take advantage of the IRA, which provides incentives for boosting domestic manufacturing of electric vehicles and their power cells. LG Chem, which is spending $3 billion to build a cathode plant in Tennessee, isn’t investing in the US just to deal with a short-term supply issue or satisfy certain regulations, Shin said. 

With global demand for EVs weakening, the entire industry is facing “huge volatility in pricing as well as availability” of raw materials Shin said in the interview Tuesday from Dalian, China, where he is the World Economic Forum’s Annual Meeting of the New Champions. LG Chem, the parent company of LG Energy Solution Ltd. — which supplies batteries to General Motors Co., Volkswagen AG and Tesla Inc. — is negotiating with several companies to secure a stable supply of raw materials, he added.

“As far as LG Chem is concerned, we’re okay in the short term — two, three years, we have enough and stable supply,” Shin said. “However, we are concerned about the supply plan maybe five or 10 years down the road.” 

He said the company doesn’t have any plans to sell down its 82% stake in LG Energy. 

--With assistance from Heejin Kim and Adrian Wong.

©2024 Bloomberg L.P.