South Korea’s LG Energy Solution Ltd (KRX:373220) said on Friday that it will invest around KRW 7.2 trillion (USD 5.5bn/EUR 5.2bn) to build a factory complex in Queen Creek, Arizona, to produce batteries for electric vehicles (EVs) and energy storage systems.
The complex will consist of two facilities with the company investing KRW 4.2 trillion in a cylindrical EV battery factory with a capacity of 27 GWh per year, and KRW 3 trillion in a lithium iron phosphate (LFP) pouch-type battery plant with a capacity of 16 GWh.
LG Energy Solution plans to break ground on both facilities in 2023. EV batteries are due to start rolling off the production line in 2025, while storage batteries will follow in 2026, according to the company's projected timetable.
The investment is four times the amount LG Energy Solution initially announced last year when it wanted to build a cylindrical EV battery plant at the same site.
The two facilities will respond to rising demand for locally manufactured EV and storage batteries in an effort to take advantage of tax credits offered by the Inflation Reduction Act (IRA), according to the Korean battery maker.
“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,” CEO Youngsoo Kwon said. “We believe it’s the right move at the right time in order to empower clean energy transition in the U.S.”
(KRW 1,000 = USD 0.770/EUR 0.176)
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