LG Will Spend $5.5 Billion on a Battery Manufacturing facility in Arizona

A South Korean battery producer stated it will quadruple its deliberate funding in a brand new manufacturing unit in Arizona to fulfill rising demand from automakers which can be attempting to ramp up manufacturing of electrical automobiles and vans.

The corporate, LG Vitality Resolution, stated it will make investments $5.5 billion to construct the complicated close to Phoenix, the place it plans to make batteries for electrical automobiles in 2025 and for vitality storage techniques the subsequent 12 months.

LG stated its resolution was pushed partially by the Inflation Discount Act, which turned regulation in August and included federal incentives for the sale and manufacturing of electrical automobiles and batteries in the USA. Clients of LG, which is likely one of the world’s largest makers of batteries for electrical automobiles and vitality storage units, embody Common Motors, Ford Motor, Honda and Tesla.

“We imagine it’s the suitable 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 multibillion-dollar funding is the newest by battery and auto firms since President Biden signed the Inflation Discount Act.

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

In December, the Division of Vitality stated it will lend $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.

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

Constructing batteries in the USA might assist decrease electrical automobile costs by slicing transportation prices whereas decreasing 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 velocity up development of electrical automobile chargers alongside highways.