LG Energy Solution of South Korea announced a ₩7.2 trillion ($ 5.5 billion) investment in a battery manufacturing site in Queen Creek, Arizona. It is the largest single investment ever for a stand-alone battery manufacturing facility in North America, the company said.
The site will consist of two manufacturing facilities. One is for 2170 cylindrical batteries for electric vehicles (EVs) and another for lithium iron phosphate (LFP) pouch-type batteries for energy storage systems (ESS).
The facilities will have an annual production capacity of 27GWh (cylindrical for EVs) and 16GWh (LFP pouch-type for ESS). Combined, they will total 43GWh.
Investment in the EV cylindrical batteries plant will total $3.2 billion, while the LFP pouch-type batteries for ESS will come in at $2.3 billion, the company said.
In a statement, the company said: “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 (₩1.7 trillion) to manufacture cylindrical EV batteries in the same location.”
Both facilities plan to break ground this year, it said. LGES said it will boost its production capacity in major product segments, develop more cohesive partnerships with its customers in the EV and ESS sectors. It will target the North American market and its new manufacturing facilities will be close to its customers.
Mass production of 2170 cells is due to start in 2025. LGES claimed this is the first-ever US cylindrical battery manufacturing facility solely invested in by a Korean battery manufacturer. The company is seeing rising demand from EV makers for locally manufactured high quality, high performance batteries. It will also benefit from the Inflation Reduction Act’s EV tax credits.
The new manufacturing facility for LFP pouch-type batteries for ESS aims to start production in 2026. LGES claimed it will be the first ESS-exclusive battery production facility in the world. LGES will further expand its presence in the entire ESS value chain.
Youngsoo Kwon, CEO of LGES, said: “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.”
A “smart factory system” will carry out all decision-making on machine-produced data. The company said this will enhance product quality and increase yield, improve manufacturing processes, and boost productivity.
