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LG plans to build the largest $5.5 billion Arizona battery factory in the US

LG Energy Solution on Friday announced a $5.5 billion battery manufacturing complex in Queen Creek, Arizona. The company claims the plant will be the largest battery manufacturing investment in the US to date.

The complex will include two manufacturing facilities—one for 2170-format cylindrical battery cells for electric vehicles and another for pocket cells for energy storage systems. quantity. The latter will use the chemical lithium iron phosphate (LFP).

2022 fresh air

2022 fresh air

The investment will be split, with $3.2 billion for the EV battery facility and $2.3 billion for the energy storage LFP battery facility. LG Energy Solution plans to break ground later this year and begin production of EV battery cells in 2025, with a targeted annual production capacity of 27 gigawatt hours. Production of energy storage cells is expected to begin in 2026. LG is aiming to produce 16 gigawatt hours of these cells annually.

LG’s total planned investment far exceeds the factory Panasonic is building near Kansas City, at the time of publication, it was called the largest investment in the world, at about $4 billion. Panasonic has not detailed exactly what types of cells will be produced at this plant, which is the first in the US outside of its partnership with Tesla.

The announcement comes just days before the federal government is expected to reveal details regarding the Inflation Reduction Act (IRA) compliance regarding the sourcing of raw materials for batteries in North America. In a press release, LG said the need for locally manufactured battery cells to meet IRA tax credit rules was factored into the decision for the Arizona plant. The company expects EV manufacturers in North America to be the main customers for the cylindrical cells produced there.

Chevrolet Blazer EV 2024

Chevrolet Blazer EV 2024

EQUAL New York Times As pointed out, LG’s current customers include General Motors, Ford Motor, Honda and Tesla. Lucid is one of them, and it assembles its cars near Casa Grande, Arizona. Among them, Tesla and Lucid are the only two types currently using cylindrical cells. After rumors that GM was considering cylindrical cells, CEO emphasizes that it is flexible.

LG in 2020 aims to triple cylinder cell production, with Cylindrical cells have a new form factor—although this factory, according to the announcement, will focus on the familiar 2170 format.

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