LG Energy Solution plans to increase its investment in an Arizona battery plant from $1.4 billion to $5.5 billion due to strong demand for EVs, which is increasing the need for battery cells.

The LGES battery plant is located in Queen Creek, AZ. The South Korean battery manufacturer plans to build two manufacturing facilities in Arizona. One facility will start making cells for EVs by 2025. The second facility will produce energy storage systems beginning in 2026.

The Arizona plant will be able to produce 27 GWh of 2170 cylindrical battery cells for EVs and 16 GWh of LFP pouch-type batteries for energy storage systems. LG Energy Solutions’ Arizona battery plant will have an annual production capacity of up to 43 GWh.

LGES is increasing its investment in Arizona because of the Biden administration’s Inflation Reduction Act. The law incentivizes battery production within the U.S. and a few other countries in North America through EV tax credits.

“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,” said Youngsoo Kwon, LGES CEO. “We believe it’s the right move at the right time in order to empower clean energy transition in the U.S.”

In 2022, LG Energy Solution announced the buildout of a $1.4 billion battery production facility in Arizona. The South Korean battery manufacturer said the Arizona plant would meet demand from “prominent startups,” not mentioning any auto brands.

LGES’ client list includes popular auto brands like Tesla, Ford, General Motors and Honda. Earlier this year, LGES and Tesla engaged in “active discussions” regarding battery cells from the Arizona plant.

We thank Teslarati for reprint permission.

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