In recent years, the automotive industry is undergoing a significant shift towards electric vehicles with the global market for EVs expected to grow exponentially in 2023. However, to meet up with this growing demand, South Korean battery manufacturer and Tesla supplier, LG Energy Solution (LGES), said it’s planning to invest in a new factory in Arizona.
According to the Korean battery manufacturer, it plans to increase its investment in an Arizona battery plant from $1.4 billion to $5.5 billion. The decision, according to the firm, was driven in part by the Inflation Reduction Act, which became law in August and included federal incentives for the sale and production of electric vehicles and batteries in the United States.
Growing EVs Manufacturing Network
Youngsoo Kwon, LGES CEO, the company’s decision to invest in Arizona illustrates their strategic initiative to keep growing the worldwide manufacturing network.
“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. We believe it’s the right move at the right time to empower the clean energy transition in the U.S.”
Initially, Arizona’s Queen Creek was the location of the LGES’s first battery factory. However, with the new investment, the South Korean battery company intends to erect two factories in Arizona. By 2025, one factory will begin producing electric car cells. Beginning in 2026, the second site will start producing energy storage systems.
Producing 43 GWh Battery Capacity Annually
The Arizona Plant will be able to produce 16 GWh of LFP pouch-type batteries for energy storage systems and 27 GWh of 2170 cylindrical battery cells for electric automobiles. The battery facility built by LG Energy Solutions in Arizona will have a maximum yearly production capacity of 43 GWh.
The construction of a $1.4 billion battery production facility in Arizona was announced by LG Energy Solutions for 2022. Without specifying any auto manufacturers, the South Korean battery company claimed that the Arizona operation would satisfy demand from well-known startups.
Do know that LGES’ client list includes popular auto brands like Tesla, Ford Motor, General Motors, and Honda. Earlier this year, LGES and Tesla engaged in active discussions regarding battery cells from the Arizona plant.
