LG Energy Solution has announced that it will invest 7.2 trillion won to construct a new cylindrical and energy storage system (ESS) LFP battery plant in Queen Creek, Arizona, USA.
This new plant will have a total production capacity of 43GWh, making it the largest global independent battery production plant located in North America.
This decision follows the company's board of directors' approval to resume the construction of its own cylindrical battery production plant in Arizona, which was under review in June 2020.
The company will expand the investment amount and production scale to 4.2 trillion won and 27GWh, respectively. Additionally, it will build an ESS LFP battery production plant with a total capacity of 16GWh by investing 3 trillion won separately on the same site, making it the first global battery company to construct a battery production plant exclusively for ESS.
The new cylindrical battery-only production plant is expected to start construction this year and aims to complete and mass-produce in 2025. The plan is to produce 2170 cylindrical batteries, the company's flagship model, and supply them to major electric vehicle customers in the US.
This investment makes LG Energy Solution the first Korean battery maker to build a cylindrical battery production plant in North America. The plant will have an average annual production capacity of 27GWh, enough to produce 350,000 high-performance pure electric vehicles.
The construction of this new plant will allow LG Energy Solution to strengthen its position as the world's leading battery company by leading the cylindrical market, which is expected to show rapid growth. The global cylindrical battery market is projected to nearly double from last year's 36.8 trillion won to 70.2 trillion won in 2026.
Furthermore, LG Energy Solution will be the first global battery company to build a battery production plant exclusively for ESS. The factory will be built with a total capacity of 16GWh by investing a total of 3 trillion won, producing pouch-type LFP batteries independently developed by LG Energy Solution. Construction is set to begin this year, with mass production targeted for 2026.
By diversifying its product portfolio and expanding its range of products from current electric vehicle pouch and cylindrical batteries to ESS LFP batteries, LG Energy Solutions will have the most diverse product portfolio among North American battery makers.
With this new plant, LG Energy Solution will secure a total of seven production bases in North America, including Michigan and Ohio, where it is operating its own plant and a joint venture plant with GM, respectively. LG Energy Solution is also constructing joint battery production plants with GM, Honda, and Stellantis in Tennessee, Michigan, Ohio, and Ontario, Canada.
Vice Chairman Kwon Young-soo, CEO of LG Energy Solution, said, "The construction of our own factory in Arizona will be an opportunity to preoccupy the rapidly growing North American electric vehicle and ESS market."
