LG Will Spend $5.5 Billion on a Battery Factory in Arizona
Investment plans for U.S. battery production have increased since President Biden signed a law that offers generous incentives for electric cars and green energy.
A South Korean battery manufacturer said it would quadruple its planned investment in a new factory in Arizona to meet growing demand from automakers that are 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 make batteries for electric vehicles in 2025 and for energy storage systems the next year.
LG said its decision was driven in part by the Inflation Reduction 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 batteries for electric cars and energy storage devices, include General Motors, Ford Motor, Honda and Tesla.
“We believe it’s the right move at the right time in order to empower clean energy transition in the U.S.,” Youngsoo Kwon, the company’s chief executive, said in a statement.
The multibillion-dollar investment is the latest by battery and auto companies since President Biden signed the Inflation Reduction Act.
Last month, Ford said it would build a $3.5 billion battery factory in Michigan, where it would use technology and services provided by the world’s largest battery manufacturer, the Chinese company 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. . .
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WASHINGTON/SEOUL — General Motors Co and Samsung SDI are set to announce as early as Tuesday they plan to build a joint venture electric vehicle battery manufacturing plant in the U.S., as the automaker diversifies its component suppliers, sources said.
An announcement would come as South Korean President Yoon Suk Yeol is in Washington to meet with U.S. President Joe Biden.
Yoon, who has made business opportunities a cornerstone of his foreign policy visits, is accompanied on the U.S. visit by more than 100 executives from South Korea’s biggest companies, including Samsung Electronics Executive Chairman Jay Y. Lee and Hyundai Motor Group Executive Chair Euisun Chung.
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GM is diversifying its battery vendors to better secure capacity of the crucial components to support its electrification goals, as the Detroit-based company attempts to catch up with Tesla Inc.
Reuters reported in January that GM and LG Energy Solution would not move forward with a fourth U.S. battery manufacturing plant. GM and LG Energy Solution are building a $2.6 billion plant in Michigan, set to open in 2024, one of three joint venture Ultium Cells LLC plants.
The new GM-Samsung SDI plant is expected to cost more than the Michigan battery plant, the sources said, but no location will be immediately announced.
GM and Samsung SDI did not comment.
“GM and LG Energy Solution have agreed on building three battery JV plants in the United States, and we would also likely have more than one battery JV plant with GM in the United States to better meet GM’s EV battery demand and electrification goals,” a Samsung SDI source, who declined to be named because he was not authorized to speak to media, told Reuters.
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