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| LG Energy Solution (LGES) CEO Kwon Young-soo speaks during a general meeting of shareholders at LG Twin Tower in Seoul, Friday. Courtesy of LGES |
By Park Jae-hyuk
LG Energy Solution (LGES) said on Friday that it has decided to resume investments to build a cylindrical battery factory in the U.S. state of Arizona, in order to meet the demand of its global clients in the wake of the implementation of the Inflation Reduction Act.
The investments have been suspended since the company decided last June to reconsider the plan, citing the rising costs brought on by global inflation.
The battery manufacturing unit of LG Group also decided to increase the size of the investment to 4.2 trillion won ($3.2 billion) from 1.7 trillion won and the annual production capacity of the factory to 27 GWh from 11 GWh.
This is the first time a Korean battery maker is building a cylindrical battery plant in North America.
In addition, LGES decided to invest an additional 3 trillion won in the U.S. state to build a plant to produce lithium iron phosphate (LFP) batteries for energy storage systems (ESS). The plant's annual production capacity will be 16GWh.
This is the first time for a global battery maker to build a plant to produce ESS batteries.
LGES aims to start the construction of the new cylindrical battery factory this year and begin mass production in 2025. The company will supply the new factory's batteries to major EV makers in the U.S., including Tesla.
"The construction of our Arizona factory will enable us to focus on the rapidly growing North American electric vehicle (EV) and ESS markets," LGES CEO Kwon Young-soo said.
LGES' announcement was made a few hours after the CEO said during a general meeting of shareholders that the company will make a decision on the Arizona plant no later than the end of the first half of this year.
He also said that negotiations have been going smoothly with Toyota Motor over a potential partnership, including the possibility of a joint venture.
The CEO added that LGES expects to produce LFP batteries for EVs starting in 2025.
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