LG Energy Solution is making a groundbreaking move in the battery industry, announcing a staggering 5.3 billion US$ (7.2 trillion won) investment in constructing a battery production plant in Arizona, USA. This ambitious venture, marking the largest single battery plant investment in history, comes amidst uncertainties in the electric vehicle market. Despite concerns over a temporary slowdown, LG Energy Solution remains bullish on the demand for specific products, particularly next-generation cylindrical batteries.
The company disclosed on April 4 its initiation of construction for the cylindrical and energy storage system (ESS) lithium iron phosphate (LFP) battery production facility in Queen Creek, Arizona. The plant aims for a production capacity of 36 gigawatts (GW) for cylindrical batteries and 17 GW for ESS LFP batteries, totaling 53 GW. Notably, this facility will boast the highest production capacity among LG Energy Solution’s eight factories in North America.
Targeting electric vehicle needs, the cylindrical battery plant will focus on producing batteries such as the "46 series," featuring a diameter of 46 millimeters. Concurrently, the ESS-dedicated battery plant will manufacture pouch-type LFP batteries developed independently by LG Energy Solution. By localizing production in the United States, the company anticipates reduced logistics and tariff costs, enhancing competitiveness in pricing.
This monumental investment defies market apprehensions, emphasizing the robust demand for specific product categories. Notably, the surge in demand follows the release of Tesla's Cybertruck, equipped with 4,680 batteries of 46-millimeter diameter, demonstrating five times larger capacity and six times higher output compared to the market's mainstay product. With orders pouring in from major players like Tesla, Rivian, and Lucid, LG Energy Solution stands at the forefront, alongside Panasonic, in mass-producing 46 series products, solidifying its position in the U.S. market.
Source: businesskorea.co.kr