LG Will Spend $5.5 Billion on a Battery Factory in Arizona

A South Korean battery producer stated it could quadruple its deliberate funding in a brand new manufacturing unit in Arizona to satisfy rising demand from automakers who’re attempting to ramp up manufacturing of electrical automobiles and vehicles.

The corporate, LG Power Answer, stated it could make investments $5.5 billion to construct the manufacturing advanced close to Phoenix, the place it plans to make batteries for electrical automobiles in 2025 and for vitality storage techniques the next yr.

LG stated its determination was pushed partly by the Inflation Discount Act, which turned legislation in August and included federal incentives for the sale and manufacturing of electrical automobiles and batteries in the USA. One of many world’s largest makers of batteries for electrical automobiles and vitality storage units, LG’s clients embody Common Motors, Ford Motor, Honda and Tesla.

“We consider it’s the precise transfer on the proper time as a way to empower clear vitality transition within the U.S.,” Youngsoo Kwon, the corporate’s chief govt, stated in a press release.

The announcement represents the most recent multibillion greenback funding by battery and auto corporations since President Biden signed the Inflation Discount Act.

Final month, Ford stated it could construct a $3.5 billion battery manufacturing unit in Michigan, the place it could use expertise and providers supplied by the world’s largest battery producer, the Chinese language firm Modern Amperex Know-how Firm Restricted, generally known as CATL. Ford can be constructing battery crops in Kentucky and Tennessee with one other Korean firm, SK On.

In December, the Division of Power stated it could mortgage $2.5 billion to Ultium Cells, a three way partnership owned by Common Motors and LG, to construct battery factories in Ohio, Tennessee and Michigan. Honda and LG are additionally investing $3.5 billion to construct a battery plant in Ohio collectively.

A wave of latest factories is anticipated to extend battery manufacturing capability in North America tenfold from 2021 to 2030, in keeping with a latest report from the Argonne Nationwide Laboratory.

Constructing batteries inside the USA might assist decrease electrical car costs by slicing transportation prices whereas lowering dependence on China, which dominates the battery provide chain. As well as, the Biden administration is attempting to encourage home mining and processing of battery uncooked supplies like lithium, in addition to pace up development of electrical car chargers alongside highways.