LG Energy Solution starts on $5.5 billion Arizona plant for Tesla

Industry

Published: 04 Apr. 2024, 18:12

LG Energy Solution starts on $5.5 billion Arizona plant for Tesla

A rendering of LG Energy Solution's $5.5 billion battery plant in Arizona [LG ENERGY SOLUTION]

Ground was broken on Wednesday for LG Energy Solution’s $5.5 billion battery plant in Arizona to produce cylindrical batteries for Tesla, possibly for the newest Cybertrucks.

The battery factory in Queen Creek is LG Energy Solution’s second independent plant in the United States, and the biggest single battery manufacturing factory in North America.

LG Energy Solution officials take a photo at a groundbreaking ceremony of its battery plant in Arizona. [LG ENERGY SOLUTION]

The facility is to have a total of 53 gigawatt-hours of production capacity, of which 36 gigawatt-hours are for 4680 battery cells. The "4680" designation indicates the size of the batteries, which are 46 millimeters (1.8 inches) in diameter and 80 millimeters in length and possess a higher energy density than existing batteries, reducing costs by 50 percent.

Most of the batteries will be delivered to Tesla, which is may install them in the latest Cybertrucks.

The other 17 gigawatt-hours of capacity will be used for the production of lithium iron phosphate batteries (LFP) for energy storage systems (ESS). An ESS improves grid stability by storing excess energy and releasing it when demand rises, and is therefore considered crucial in increasing energy efficiency for renewable energy plants.

LG Energy Solution's prodcution across North America [LG ENERGY SOLUTION]

The groundbreaking comes after LG Energy Solution said earlier that it is “reassessing” the Arizona plant project, citing unfavorable business conditions including increasing costs driven by rising inflation.

Production will start at both the cylindrical and LFP facilities in 2026.

"It is also the first manufacturing facility to produce cylindrical batteries in the United States. Right here is where we can build quality cylindrical batteries, which will be used to power millions of EVs," said Brian Oh, Head of Mobility & IT Battery Division at LG Energy Solution. "It gives me great pleasure knowing that this landmark project here in Queen Creek will create thousands of new, quality jobs that will contribute to building green economy."

LG Energy Solution has another stand-alone facility in Michigan, which was built a decade ago and is currently undergoing expansion that will quintuple its average annual production capacity.

The company also has five other joint venture facilities in the U.S. with major automakers, including General Motors, Honda and Hyundai Motor Group.

BY SARAH CHEA [chea.sarah@joongang.co.kr]