LG Energy boosts US battery production with $1.4 billion investment thenewsupdate

Screen Shot 2022 01 27 at 4.45.46 PM e1643275382977

South Korea’s LG Energy Solution, which supplies electric vehicle batteries to Tesla, Lucid Motors, General Motors and Proterra, said Thursday it is investing $1.4 billion (KRW 1.7 trillion) to build a cylindrical battery plant in South Korea. Queen Creek, Arizona.

The move is a clear indication that LG Energy is expanding its presence in the United States. In January, the company said it plans to spend $2.1 billion on General Motors to build a third joint EV battery plant in the US. Last year, Stellantis also reached an agreement with LG to manufacture battery cells and modules in North America.

LG’s investment in Arizona comes at a time when demand for cylindrical cells and applications that use cylindrical batteries, such as power tools that require instant power or mobility devices such as EVs or e-bikes, are increasing in the North American market. That’s because these types of batteries are relatively smaller but have a high energy density, according to an LG spokesperson.

Construction on the 11 gigawatt-hour site will begin in the second quarter of 2022, according to the company, with mass production starting in 2024.

LG Energy says the plant will be the first cylindrical-type battery plant in North America to ship to EV manufacturers. According to a Reuters report, EV makers such as Tesla, Lucid and Proterra could be their potential customers. LG says it has contracts in the works but declined to share which companies it would supply through its Arizona facility.

LG Energy says it is considering looking for additional production capacity in the US. In January, LG Energy raised more than $10 billion through its IPO.

Japan’s Panasonic, which also supplies battery products to Tesla, is looking for sites to build a factory in Oklahoma or Kansas, NHK reported in February. Toyota also plans to build a battery factory in the US, aiming to start production in 2025.

The influx of foreign battery companies developing batteries in the US could be a product of President Joe Biden’s infrastructure bill, which is setting aside billions in funding to develop a national battery supply chain.

LG has not responded in a timely manner to confirm its eligibility for US funding to set up such supply chains.

Leave a Reply

Your email address will not be published.