Mar 24, 2023
LG Energy Solution to Spend $5.5 Billion on US Battery Plants
(Bloomberg) -- LG Energy Solution Ltd. will invest 7.2 trillion won ($5.5 billion) building a giant manufacturing complex in Arizona as the electric-car battery maker seeks to speed up production in order to meet rising demand for clean cars.
The company will spend 4.2 trillion won on a plant with an annual production capacity of 27 gigawatt-hours for cylindrical batteries, enough to power 350,000 electric vehicles a year, the Seoul-based company said in a statement Friday. It aims to begin mass production in 2025.
LG will build a separate plant with 16 gigawatt-hours capacity for energy storage systems using lithium-iron-phosphate pouch-type batteries, which will start mass production in 2026.
Customers for plant, which will be compliant with the US Inflation Reduction Act’s push for domestic production for EVs, will include automakers and startups based in North America.
Demand for EV batteries has “risen significantly” from customers in North America because of the IRA, LG said. The IRA is expected to spur the growth of the renewable energy industry in North America, it added.
In June 2022, LG said it was reviewing the plant as higher prices for raw materials inflated the cost of the project amid inflation. LG is planning to have seven plants in North America in total, including three plants with General Motors Co. in several states in the US, one with Honda Motor Co. in Ohio, and another in Canada with Stellantis NV.
GM and LG have canceled plans to build a fourth plant in the US as the battery maker didn’t commit to GM’s timeline, Bloomberg reported in January. No decision has been made on the fourth plant with GM, LG said at the time.
The firm is also in talks with Toyota Motor Corp. for a potential partnership, chief executive officer Kwon Young-soo told reporters at the annual shareholders’ meeting Friday, without elaborating.
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