LG Energy Solution, the batteries unit of LG Group, has laid out a new $1.36 billion funding plan to drastically ramp up the capacity of its plant in the US state of Michigan in the next three years.

In a regulatory filing Friday, parent company LG Chem said LG Energy Solution's Michigan arm will raise $681 million in fresh capital without rights to add new production facilities to the Michigan plant, while securing the remaining $681 million from local borrowing.

The new funding aims to cope with growing demand in the North American market for batteries used in electric vehicles and for energy storage systems, the filing showed.

With the planned investment, the plant’s production capacity is expected to surge from the current 5 gigawatt-hours to 40 gigawatt-hours by 2024.

The new funding scheme is the latest step in the battery maker’s renewed push to secure a firm footing in the burgeoning US market for electric vehicle batteries and energy storage systems.

In March, the firm pledged to spend a combined 5 trillion won ($4.2 billion) by 2025 to elevate its battery production capacity in the US to reach an annual rate of 70 gigawatt-hours.

LG Energy Solution has also sought to beef up its partnership with global carmakers and has expanded its production base in the lucrative US market.

The firm in October teamed up with the Netherlands-based Stellantis, which owns the Chrysler brand in the US, to build a new battery plant with annual production capacity of 40 gigawatt-hours, aiming to start production in the first quarter of 2024. The location for the new facility is currently under review.

Also in April, LG Energy Solution and General Motors announced they will jointly invest $2.3 billion to build a second battery production line in Spring Hill, Tennessee, by 2023. The two companies in 2019 created the joint venture Ultium Cells, with its first battery factory in Ohio in another $2.3 billion project. Both facilities under construction will be capable of 35 gigawatt-hours of annual production.

Meanwhile, LG Energy Solution’s imminent initial public offering is expected to give the battery maker a big boost. The company filed for the IPO in June with the Korea Exchange, the main stock bourse operator here, and is awaiting approval for the listing.

LG Energy Solution is a wholly owned arm of LG Chem. The company was founded as a result of a split-off from LG’s chemicals arm in December 2020.