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LG Energy Solution says to invest $4.5 billion in U.S. battery production through 2025

CommoditiesMar 11, 2021 12:15PM ET
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© Reuters. The logo of LG Chem is seen at its office building in Seoul

By David Shepardson and Heekyong Yang

WASHINGTON/SEOUL (Reuters) - LG Energy Solution said on Thursday it plans to invest more than $4.5 billion in its U.S. battery production business through 2025 and add 4,000 jobs as it considers building at least two new U.S. plants, a company executive told reporters.

The South Korean supplier, a unit of LG Chem, said the investment will result in an additional 70GWh of U.S. battery production capacity. The company declined to say where in the United States it is considering a new battery manufacturing plant, but said it would select the new locations in the first half of the year.

Denise Gray, president of LG Energy Solution's Michigan unit, said the investment, which would indirectly create another 6,000 jobs during construction, was being made to respond to the growing electric vehicle market.

"We are eager to expand our production capacity so that it can meet the needs of the numerous global automakers across the U.S. and Europe," Gray said.

LG is also in advanced talks with General Motorsto build a more than $2 billion second joint venture cell manufacturing plant in Tennessee that could be announced later this month. The first LG-GM JV plant is nearing completion in Lordstown, Ohio. Both companies have confirmed they are in discussions for a new plant.

LG Chem has been in a battle with cross-town rival SK Innovation after it alleged that SK stole trade secrets. The U.S. International Trade Commission (ITC) sided with LG Chem in February, but SK Innovation has lobbied the White House to overturn the decision, warning it would force it to halt production on a new factory in Georgia.

SK Innovation has received proposed terms, including financial reparations, from LG Energy Solution for a settlement to resolve the feud, a source told Reuters. SK Innovation said on Thursday it will not accept any proposal that would end up crippling SK's U.S. business.

LG Energy Solution executives said Thursday's announcement had nothing to do with the ITC review.

"This is more about (having a) very proactive and preemptive investment plan prior to confirmation of demand from our customers," LG Energy Solution Senior Vice President Chang Seung-se said.

"By adding this capacity earlier... we can quickly respond to market demand and customers’ orders,” he told reporters.

LG Energy Solution says to invest $4.5 billion in U.S. battery production through 2025
 

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