Korea’s LGES to invest $5.5 billion in smart US battery complex
LG Energy Solution (LGES) will invest approximately KRW7.2 trillion ($5.5 billion) to construct a battery manufacturing complex in Queen Creek, Arizona. The complex is expected to utilise smart manufacturing technologies and will consist of a total 43GWh storage capacity.
The battery manufacturing complex will consist of two manufacturing facilities – one for cylindrical batteries for electric vehicles (EV) and another for lithium iron phosphate (LFP) pouch-type batteries for energy storage systems (ESS).
In a bid to enhance product quality, increase yield, improve manufacturing processes and boost productivity, the new manufacturing facilities will utilise a smart factory system that carries out all decision making on machine-produced data.
It marks the largest single investment ever for a stand-alone battery manufacturing facility in North America. It is also more than four times the amount the company initially announced last year – KRW1.7 trillion ($1.3 billion) – to manufacture cylindrical EV batteries in the same location.
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Out of the KRW7.2 trillion, the company plans to invest KRW4.2 trillion ($3.2 billion) in building the cylindrical battery manufacturing facility with a capacity of 27GWh, and KRW3 trillion ($2.3 billion) in the LFP pouch-type battery facility with the capacity of 16GWh.
Both facilities, totaling 43GWh, plan to break ground this year.
The cylindrical battery manufacturing facility aims to start mass production of 2170 cells in 2025, mainly for EV makers in North America. It will be the first-ever US cylindrical battery manufacturing facility solely invested in by a Korean battery manufacturer.
The manufacturing facility for LFP pouch-type batteries for ESS, which is the first ESS-exclusive battery production facility in the world, aims to start production in 2026.
The company’s decision to increase investment in cylindrical EV battery production in North America comes from rising demand from EV makers for locally manufactured high quality, high performance batteries in an effort to satisfy the Inflation Reduction Act (IRA)’s EV tax credits.
“Our decision to invest in Arizona demonstrates our strategic initiative to continue expanding our global production network, which is already the largest in the world, to further advance our innovative and top-quality products in scale and with speed,” said Youngsoo Kwon, CEO of LG Energy Solution.
“We believe it’s the right move at the right time in order to empower clean energy transition in the US.”
