LG to spend $5.5 billion on Arizona battery factory
A South Korean battery maker said it will quadruple its planned investment in a new plant in Arizona to meet growing demand from automakers trying to ramp up production of electric cars and trucks.
The company, LG Energy Solution, said it would invest $5.5 billion to build the complex near Phoenix, where it plans to manufacture batteries for electric vehicles in 2025 and for energy storage systems l ‘next year.
LG said its decision was partly prompted by the Cut Inflation Act, which became law in August and included federal incentives for the sale and production of electric vehicles and batteries in the United States. Customers of LG, which is one of the world’s largest makers of electric car batteries and energy storage devices, include General Motors, Ford Motor, Honda and Tesla.
“We believe this is the right move at the right time to help drive the clean energy transition in the United States,” Youngsoo Kwon, the company’s chief executive, said in a statement.
The multi-billion dollar investment is the latest from battery and automakers since President Biden signed the Cut Inflation Act into law.
Last month, Ford announced it would build a $3.5 billion battery plant in Michigan, where it would use technology and services provided by the world’s largest battery maker, China’s Contemporary Amperex. Technology Company Limited, known as CATL. Ford is also building battery plants in Kentucky and Tennessee with another South Korean company, SK On.
In December, the Department of Energy announced it would lend $2.5 billion to Ultium Cells, a joint venture owned by General Motors and LG, to build battery factories in Ohio, Tennessee and Michigan. . Honda and LG are also investing $3.5 billion to build a battery plant in Ohio.
A wave of new factories is expected to boost battery manufacturing capacity in North America tenfold from 2021 to 2030, according to a recent report from Argonne National Laboratory.
Building batteries in the United States could help lower prices for electric vehicles by reducing transportation costs while reducing reliance on China, which dominates the battery supply chain. Additionally, the Biden administration is trying to encourage domestic mining and processing of battery feedstocks like lithium, as well as accelerating the construction of electric vehicle chargers along highways.
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