Steve Scherer and Aishwarya Nair

(Reuters) –General Motors Co. and South Korea’s POSCO The companies announced Monday that a new $400 million plant will be built in Canada to make battery materials. This is as Chemical, a carmaker, plans to increase production of electric cars (EVs) in future.

Cathode Active Material (CAM), will be produced at the plant in Becancour. The most expensive and complex chemical component in an electric vehicle battery is the cathode.

Scott Bell, GM Canada President and Managing director, stated that the cathode is about 40% of each EV battery cell’s cost. We plan to be able to produce a million electric vehicles in North America by 2025.

Construction on the plant is expected to begin as soon as possible. It will be up and running in 2025. A statement said that the plant would create 200 jobs once completed. GM aims for light cars that can run entirely on electric power by 2035.

The CAM made at the plant is used to produce GM’s Ultium Batteries that will power the company’s EVs like the Chevrolet Silverado EV. Bell announced that GM’s Ingersoll (Ontario) factory will start EV production in the latter part of this year.

The companies stated that both Canada’s federal government as well as Quebec’s provincial governments are in contact with GM/POSCO Chemical. However, details weren’t released.

Canada’s richness in key materials, such as lithium, graphite, and cobalt, has led to it being a magnet for battery producers, in an effort to protect its automotive manufacturing sector.

This is Becancour’s second CAM plant announcement in less than a week. BASF SE, OTC:), announced on Friday it would also be establishing one at Becancour.

Francois-Philippe Champagne, Canada’s industry minister said Becancour would become the hub of Canada’s “ecosystem” for EV batteries. Champagne added that the country is receiving more “good news”, and said there are “very real discussions” about building a battery plant in Canada.

Champagne stated, “Starting with this announcement we will be integrated into the global supply chain of cars in North America.”