LG Energy Solution decided to build a 558 billion traction

LG Energy Solution decided to build a $5.58 billion traction battery factory in Arizona

This week, South Korean company LG Energy Solution, the second largest maker of traction batteries for electric vehicles after CATL, closed opinion on its willingness to build two traction battery manufacturing companies in Arizona with a combined value of $5.58 billion, although the company chose not to do so last year.

    Image source: LG Energy Solution

Image source: LG Energy Solution

The Korean battery maker went on hiatus in June citing tough economic conditions, but in the months that followed turned to finding customers in the US who would offer a strong market for traction batteries. Not only will you get Tesla, General Motors, and Lucid, but also companies interested in manufacturing stationary energy storage systems.

The Arizona site will house two LG Energy Solution facilities. One will focus on cylindrical lithium batteries for electric vehicles, while the other will produce lower-cost LFP batteries for stationary storage systems.

If LG Energy Solution expected to spend about four times less on this project last summer, then its determination to increase investment to $5.58 billion was lightened not only by success in finding customers, but also by hope to receive subsidies from the authorities in the United States under the so-called Inflation Reduction Act (IRA). Government support for US-based companies allows manufacturers to save up to $45 per kWh of battery capacity produced. LG Energy Solution companies operate in South Korea, China, Poland, Canada and Indonesia. Equipped with US-made batteries, electric vehicles allow buyers in the country to qualify for subsidies of up to $7,500 per vehicle.

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Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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