South Korea’s LG Energy Solutions, which supplies electric vehicle batteries to Tesla, Lucid Motors, General Motors and Proterra, on Thursday said it is investing $1.4 billion (KRW1.7 trillion) to built a cylindrical battery plant in Queen Creek, Arizona.
The move is a clear sign that LG Energy is increasing its presence in the United States. In January, the company said it plans to spend $2.1 billion with General Motors to build a third joint venture EV battery factory in the US Last year, Stellantis also reached an agreement with LG to manufacture batteries and modules in North America.
LG’s investment in Arizona comes at a time of demand for cylindrical batteries and applications that use cylindrical batteries, such as power tools that require instant power or portable devices such as electric vehicles or electric bicycles, which are on the rise in the North American market. That’s because these batteries are relatively smaller but have high energy density, according to an LG spokesperson.
Construction of the site with an 11-gigawatt-hour capacity will begin in the second quarter of 2022, with mass production commencing in 2024, according to the company, the company said.
LG Energy says the plant will be the first cylindrical battery plant in North America to be supplied to electric vehicle makers. According to a report by Reuters, Electric vehicle manufacturers such as Tesla, Lucid and Proterra could be their potential customers. LG said it has a contract during the operation, but declined to say which companies it will supply through the Arizona factory.
LG Energy said it is considering seeking more US production capacity. In January, LG Energy has raised over $10 billion through its initial public offering.
Japan’s Panasonic, which also supplies battery products to Tesla, is looking for sites to build a factory in Oklahoma or Kansas, as reported by the company. NHK in February. Toyota is also planning to build a battery factory in the US, with the goal of starting production in 2025.
The wave of foreign battery companies developing batteries in the US could be a product of President Joe Biden’s infrastructure bill, which has spent billions of dollars developing the national battery supply chain.
LG did not respond promptly to confirm whether it was eligible for US funding to set up such a supply chain.
