LG Energy Solution has confirmed that it will restart its $5.6bn battery project in Arizona to be eligible for federal incentives under the Inflation Reduction Act. The South Korean company initially announced a $1.3bn investment plan in June 2021, but stalled the project due to economic uncertainty.
The new plan will build two facilities in Arizona, one for cylindrical batteries for electric vehicles (EVs) and another for lithium iron phosphate (LFP) pouch-type batteries for energy storage systems. The investment follows an increasing demand from EV makers for high-quality batteries to satisfy the Inflation Reduction Act’s EV tax credits.
LG Energy Solution supplies batteries to Tesla, Lucid Group, and other automakers. The company has also recently announced a $4.4bn battery plant in Ohio with Honda Motor.
According to Meritz Securities analyst Rho Woo-ho, “When LGES first announced its Arizona plan, Tesla was probably not in the proposed plant’s client list, but it is now likely to be in the list and one of major reasons why investment has increased sharply.” (via Reuters)
Production of EV batteries from the new plant will begin in 2025, and the energy storage system batteries in 2026.
LG Energy Solution secures lithium carbonate supply deal with Compass Minerals
