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LG’s new US battery factories to be 3 times bigger than SK’s Georgia plants

March 12, 2021 - 16:20 By Kim Byung-wook
LG Energy Solution’s cylindrical lithium-ion battery cells (LG Energy Solution)


LG Energy Solution said Friday that it will invest 5 trillion won ($4.42 billion) through 2025 to build at least two more electric vehicle battery factories in the United States.

Set for completion in 2025, the new factories will offer 70 gigawatt-hours of additional annual battery production capacity in the US. LG Energy Solution currently has one local electric vehicle battery production facility in Michigan that is capable of producing 5 gigawatt-hours.

“The Green New Deal in the US will accelerate the growth of the EV market as well as the energy storage systems market. LGES will secure battery production capability in advance and contribute to the success of the Green New Deal,” LG Energy Solution President and CEO Kim Jong-hyun said.

LG Energy Solution’s Michigan plant manufactures only pouch-type batteries for electric vehicles. The new factories will manufacture both pouch and cylindrical batteries for electric vehicles and those for energy storage systems. The new plants will generate 6,000 construction jobs and will hire 4,000 workers after they are complete. Sites for new factories will be decided in the first half of this year.

LG Energy Solution’s aggressive expansion comes amid worries over the shutdown of SK Innovation’s two battery factories, with a combined capacity of 21.5 gigawatt-hours, under construction in the US state of Georgia.

Last month the US International Trade Commission ordered a 10-year ban on SK Innovation for stealing electric vehicle battery trade secrets from LG Energy Solution. The ban prohibits SK Innovation from importing electric vehicle batteries to the US and from producing or selling them there.

The ban, which takes effect after a grace period of four years, raised concerns over the fate of SK Innovation’s two electric vehicle battery factories, which are scheduled to supply batteries to Ford and Volkswagen in the US. Once they are complete, the two factories can provide batteries to Ford for two years and to Volkswagen for six months.

When the grace period ends in 2025, LG Energy Solution’s 70-gigawatt-hour expansion will be completed.

Additionally, LG Energy Solution is considering whether to launch a second electric vehicle battery factory with General Motors.

In 2019, LG Energy Solution and GM created a joint venture called Ultium Cells and invested $2.3 billion to build a new electric vehicle battery factory in Ohio with a capacity for 35 gigawatt-hours, which will be operational next year.

“Specific details regarding the (investment) size and site of Ultium Cells’ second EV battery factory will be decided in the first half of this year. The production capacity will be similar to that of the Ohio plant and is expected to start operations after 2023,” an LG Energy Solution official said.

By 2025, LG Energy Solution will be equipped with a total battery production capacity of 145 gigawatt-hours in the US.

By Kim Byung-wook (kbw@heraldcorp.com)