South Korea’s LG Energy Solution Ltd (LGES) said on Friday it will invest 7.2 trillion won ($5.58 billion) in building a battery plant in Arizona, restarting a project that was suspended last year due to poor economic conditions. The world’s No. 3 maker of electric-vehicle batteries, which supplies Tesla Inc., Lucid Group Inc. and other automakers, said in June that it was reassessing the then $1.7 trillion battery because of “unprecedented” economic conditions. The South Korean won’s investment plan, which was only three months into its preliminary unveiling.
The announcement on Friday came after LGES said in January that it had been in “active discussions” with Tesla and electric vehicle startups to supply batteries from the proposed factory.
In a statement, LGES said the new Arizona plant will include two manufacturing facilities — one for cylindrical batteries for electric vehicles (EVs) and the other for lithium iron phosphate (LFP) for energy storage systems (ESS). ) pouch battery.
“The company’s decision to increase investment in North American cylindrical EV battery production comes amid increasing demand from EV manufacturers for locally manufactured high-quality, high-performance batteries in an effort to meet EV tax credits from the Inflation Reduction Act (IRA) ,” the company said in a statement.
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Automakers and electric vehicle battery makers are racing to set up manufacturing plants in the US to offset production costs with federal subsidies that can generate up to $45 per kilowatt-hour (kWh).
LGES, which supplies Tesla, General Motors Co. and others, also has production facilities in South Korea, China, Poland, Canada and Indonesia.
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LGES shares were down 1.6 percent by 0620 GMT, while the benchmark KOSPI index was down 0.4 percent.
First published date: March 24, 2023 at 13:12 PM CST