Fri, January 27, 2023

LG Energy invests $1.4B to build US battery factory

LG energy

LG Energy invests $1.4B to build US battery factory

On Thursday, LG Energy Solution announced to invest $1.40 billion to build a battery factory in Arizona, a southwestern US state.

The South Korean battery manufacturing company aims to meet demands from prominent startups and other North American customers.

Accordingly, this will be its first factory in the United States to make cylindrical cells, a type of battery used in electric vehicles.

LG Energy anticipated the facility’s construction to begin in the second quarter of 2022. It also expected its mass production to start in 2024 with an output capacity of 11-gigawatt hours.

Reports revealed that its potential customers would include automotive company Proterra and Philip Morris, maker of IQOS heated tobacco sticks.

In addition, it would still be a significant supplier for electric car makers Tesla and Lucid.

In a statement, LG Energy also plans to consider securing additional production capacity at its Arizona factory in the future.

The company explained that it sees mounting demand for cylindrical batteries from various customers. This includes automakers and power tool makers.

Last Tuesday, Tesla mentioned that battery production would be the limiting factor for the EV industry in the near term.

The company called on suppliers to raise their outputs while the leading automaker started making in-house cells.

Eventually, Japan’s Panasonic Corporation also stated plans to invest billions of dollars to build a factory.

The facility is a partnership with Contemporary Amperex Technology to make a new type of EV battery for Tesla. Panasonic aims to build the plant in either Oklahoma or Kansas.

Then, Lucid mentioned last month that it had signed multi-year supply agreements with two battery suppliers.

However, the firm did not specify the companies’ name, but it sources batteries from LGES and Samsung SDI.

Stellantis, LG Energy invests $4.10B

The announcement of the Arizona facility came after LG Energy Solution unveiled its joint venture with automaker Stellantis.

The partnership has a value of $4.10 billion. It aims to establish Canada’s first large-scale, domestic electric vehicle battery manufacturing facility.

The plant’s construction will start later this year in Windsor, Ontario. Then, its operations will launch in the first quarter of 2024.

The firms expected the facility to have more than 45-gigawatt hours annual production capacity. Once fully operational, it will create an estimated 2,500 new jobs.

The latest plant is part of the automaker’s target to accelerate its EV investment. Stellantis aspires to achieve sales of 5.00 million EVs globally by 2030.

At the same time, LG Energy announced a $2.60 billion joint venture with General Motors in the United States.

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