LG Energy Solution To Invest $4.5 Billion In New U.S. Battery Plants03/11/2021
The company considers building at least two new EV battery cell factories.
LG Chem’s LG Energy Solution revealed bold investment plans for the U.S. Through 2025, the company plans to invest more than $4.5 billion in additional EV battery manufacturing capacity.
In effect, an additional 70 GWh of annual cell output could be added. If we compare the two numbers, it seems that the installation of 1 GWh of annual production capacity costs over $64 million.
The company hints also that about 4,000 new direct jobs will be created. Plus an additional 6,000 indirect jobs, required during construction.
Denise Gray, president of LG Energy Solution’s Michigan unit said:
“We are eager to expand our production capacity so that it can meet the needs of the numerous global automakers across the U.S. and Europe,”
At least two plants
Under consideration are at least two new U.S. plants. There are no details about potential customers or localization at the moment (the decision will be made in the first half of the year).
LG Energy Solution currently has in the U.S. one plant in Michigan and one joint venture with General Motors – Ultium Cells (under construction) in Ohio.
As we know, LG Energy Solution and GM are in talks to build a second battery joint venture. It could be another $2 billion or so plant. This is the first possible investment and an official announcement is expected as early as this month.
Our guess is that the second big investment for LG Energy Solution might be related to Tesla, as the South Korean manufacturer is working on its pilot 4680 battery cell production line for a reason.
Other investments might be related to the U.S. International Trade Commission (ITC)’s 10-year ban for SK Innovation. There are at least two EV manufacturers (Ford and Volkswagen) that might be willing to buy LG Energy Solution batteries if the situation with SK Innovation is not cleared.
A rush with a massive investment might have a second reason. If LG Energy Solution would speed up and assure a high supply level in the U.S. within 2-3 years, there would be no excuse to veto the SK Innovation ban. A smart move on the chessboard.
LG Energy Solution Senior Vice President Chang Seung-se said:
“This is more about (having a) very proactive and preemptive investment plan prior to confirmation of demand from our customers,”
“By adding this capacity earlier… we can quickly respond to market demand and customers’ orders,”
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