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General Motors and LG Energy Solution will spend an additional $275 million in their joint venture battery plant in Tennessee to hike production by more than 40%.

Ultium Cells LLC said Friday that the new investment is in addition to the $2.3 billion announced in April 2021 to set up the 2.8 million-square-foot facility. Production at the plant is set to begin in late 2023.

Domestic production of battery cells in North America will be critical for automakers in the years to come to grow their EV footprints and qualify for federal incentives under the Biden administration’s Inflation Reduction Act.

The new investment by GM and LG Energy is expected to increase capacity from 35 gigawatt-hours to 50 gigawatt-hours when the plant is fully operational.

The Ultrium Cells Spring Hill site is set to join other joint venture battery cell manufacturing sites in Ohio and Michigan. A facility in Michigan is also under construction and is expected to begin production in late 2024.

“Ultium Cells will play a critical role in making GM’s commitment to an all-electric future a reality,” said Tim Herrick, GM’s vice president of EV Launch Excellence. “By expanding battery cell output at Ultium Cells Spring Hill, this investment will help GM offer customers the broadest EV portfolio of any automaker and further solidifies our path toward U.S. EV leadership.”