According to The Korea Herald, March 24, LG Energy Solution, the South Korean battery maker, announced its plan to invest $5.6 billion in two battery plants in the US, to further strengthen its leadership in the battery value chain in North America. These battery plants will be located in Queen Creek, Arizona, and are expected to begin production in 2025 and 2026, respectively.
The first battery plant, which has an investment of $3.2 billion, will produce cylindrical batteries to be supplied to US electric vehicle (EV) makers. LG Energy Solution will be the first Korean battery maker to set up a cylindrical battery plant in North America with an annual production capacity of 27 gigawatt-hours, enough to power 350,000 EVs. The cylindrical batteries are expected to be supplied to Tesla.
The second battery plant, with an investment of $2.3 billion, is specifically designed to produce lithium iron phosphate batteries for energy storage systems (ESS). This plant will have a production capacity of 16 GWh per year and will be the first of its kind in the world by a global battery maker.
The Arizona site will have the largest production capacity at 43 GWh in North America, according to LG Energy Solution. The company aims to meet the increasing demand for high-quality and high-performance batteries in the North American region.
The investment was approved at a board of directors meeting on Friday. LG Energy Solution said that the decision to expand its investment was due to the increasing demand for a stable supply of high-quality and high-performance batteries in North America.
With the upcoming plants in Arizona, LG Energy Solution will have seven production sites in North America, including its Michigan plant, a joint plant in Ohio with General Motors, two more plants with General Motors under construction in Tennessee and Michigan, another plant in Ohio with Honda, and a plant in Ontario, Canada, with Stellantis.
The global cylindrical battery market, estimated at $28.4 billion last year, is projected to grow to reach $54.1 billion in 2026. Market tracker SNE Research forecasts that the North American ESS market will grow tenfold to hit 159 GWh in 2030.
The CEO of LG Energy Solution, Kwon Young-soo, said, “The construction of our own plants in Arizona will serve as an opportunity to surely secure the fast-growing North American EV and ESS markets. We will provide the world’s best customer value by having a differentiated global production capacity and further strengthening unrivaled product quality.”
