Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
LG Energy Solution to build new battery factories in US, Canada
Kim Dong-myung, right, head of LG Energy Solution's Advanced Automotive Battery Division, poses with Mark Stewart, chief operating officer of Stellantis during an investment announcement event in Windsor, Ontario, Canada, March 23. Courtesy of LG Energy Solution
By Baek Byung-yeul
Battery maker to invest total of $5.3 billion in Arizona, Ontario
By Baek Byung-yeul
LG Energy Solution (LGES) is expanding its battery cell manufacturing capacity in North America, as the company unveiled two new battery plant projects in the United States and Canada, according to LG Group's battery-making subsidiary, Thursday.
The battery maker said it will invest 1.7 trillion won ($1.39 billion) in Queen Creeck, Arizona to build a cylindrical battery cell-manufacturing plant in the U.S. LGES will start construction of the new factory, which will have a production capacity of 11 gigawatt-hours, starting in the second quarter of 2022, and aims to begin mass production in the second half of 2024.
LGES added it will also build a battery plant in Windsor, Ontario, Canada together with its partner and multinational automaker Stellantis. The two sides will jointly invest 4.8 trillion won to build a total production capacity of 45 gigawatt-hours plant there. Construction will begin in the second half of this year and mass production of pouch battery cells will begin in the first half of 2024.
With a total investment of 6.5 trillion won ($5.3 billion), LGES aims to catch up with global battery leader CATL, which has focused on the domestic Chinese market and is leading in the North American market, where demand for electric vehicles (EVs) is soaring.
Battery cells produced in the Canadian factory will be supplied to EVs of Stellantis' car brands such as Chrysler and Jeep. According to what it calls the Dare Forward 2030 plan, Stellantis aims to increase its EV sales to 50 percent of its total car sales by 2030.
Kwon Young-soo, CEO of LGES, said in a statement that, "We will produce the most competitive products in all aspects including quality, performance, cost and then supply them to Stellantis, a key customer of ours.”
For the cylindrical battery cell factory in Arizona, an LGES spokesman said the company will be the first Korean battery maker to build its own production lines exclusively for cylindrical batteries in North America.
“In the U.S., electric car startups are increasingly using cylindrical batteries and demand for wireless power tools are also rapidly increasing,” the official said. “With the new U.S. factory, we plan to actively respond to the North America's cylindrical battery market, which has shown skyrocketing growth.”
Once the Canadian joint venture factory and the U.S. cylindrical factory are ready to begin full operation after 2025, LGES will have a total production capacity of over 200 gigawatt-hours in North America alone, an amount that can produce around 2.5 million high-performance EVs that can travel more than 500 kilometers per single charge.
Currently, LGES has its own battery plant in Michigan and is constructing three new plants with U.S. automaker GM in Ohio, Tennessee and Michigan. The massive investment plan is also in line with U.S. President Biden's policy, which plans to provide subsidies to EVs that use battery cells produced in North America.