LG Energy expands battery factory base in North America
The Korean battery company announced Thursday it is investing 1.7 trillion won ($1.4 billion) in a factory to make cylindrical batteries in Arizona, U.S.
No other Korean battery maker has built an American factory for cylindrical batteries, which are used in Tesla vehicles and a few EV startups.
Construction on the factory, which will have a capacity of 11 gigawatt-hours (GWh) per year, will start in the second quarter of this year. Production is expected by the latter half of 2024.
“EV startups in the U.S. that use cylindrical batteries have started to emerge while demand for cordless tools is also on a rapid rise,” said a spokesperson from LG Energy Solution.
Cordless tools usually run on small cylindrical batteries.
“LG Energy Solution plans to handle demand for cylindrical batteries in North America through the new factory.”
The company said it might expand the factory later.
Tesla and other EV makers such as Lucid and Rivian use cylindrical batteries in their EVs while legacy carmakers such as General Motors, Ford and Hyundai Motor use pouch types.
Cylindrical batteries are cheaper to produce and have better temperature control, which reduces the risk of fire.
LG Energy Solution is a battery supplier to both Tesla and Lucid.
The company announced the previous day that it is building a factory in a joint venture with multinational auto giant Stellantis in Canada.
LG Energy Solution and Stellantis will together invest 4.8 trillion won to build a pouch-type lithium-ion battery factory in Ontario.
LG Energy Solution will own 51 percent of the joint venture, tentatively named LGES-STLA JV, with an investment of 1.7 trillion won and a guarantee of the debt related to the joint venture, which totals 760 billion won.
Stellantis will own 49 percent.
Construction of the factory will start by the latter half of this year, and production by early 2024.
It will be have a capacity of 45 GWh annually by 2026, according to LG Energy Solution. The batteries it makes will be supplied to Stellantis brands such as Chrysler and Jeep.
Through joint ventures with Stellantis and General Motors as well as factories of its own, LG Energy Solution's battery manufacturing capacity in North America will reach 150 GWh by 2025.
Stellantis has been making partnerships with Korean battery makers since last year. Stellantis said it plans to sell 5 million EVs by 2030 and intends to invest 41 trillion won by 2025 to develop and manufacture EVs and their software.
Last year, it signed a memorandum of understanding with Korea’s Samsung SDI to build a battery factory in the U.S. with an annual manufacturing capacity of 23 GWh.
"Our joint venture with LG Energy Solution is yet another stepping stone to achieving our aggressive electrification roadmap in the region aimed at hitting 50% of battery electric vehicle sales in the U.S. and Canada by the end of the decade,” said Carlos Tavares, Stellantis CEO.
BY JIN EUN-SOO [email@example.com]