Tesla battery supplier LG Energy Solutions has announced that it will build a $1.4 billion battery production facility in Arizona as demand for electric vehicles soars across the United States.
LG Energy Solutions said it will build the $1.4 billion plant to meet demand from “high-profile start-ups” and other North American companies as consumer confidence begins to shift toward sustainable cars. The company believes that the plant is expected to be operational by 2024.
The Arizona plant will be LGES’ first plant in the United States to manufacture cylindrical cells for electric vehicles, which are typically used by automakers such as Tesla and Lucid, which has a vehicle production facility in Arizona. LGES is expected to start work on the plant in the second quarter of 2022, with mass production expected to begin in 2024 with a capacity of 11 gigawatt-hours, LGES said in a statement.
With the creation of our new website Arizona manufacturer, LG Energy Solution aims to deliver unparalleled consumer value in the rapidly growing cylindrical battery market,” Youngsoo KwonLG Energy Solution CEO said. “LGES will provide the most reliable, competitive and advanced products to rise as the best business partner that our customers value and trust.”
Tesla and Lucid could be among the potential customers to take advantage of the plant. In addition, Proterra and Philip Morris, the manufacturer of heated tobacco sticks, could be companies other than cars that receive cells from the factory, Reuters He said. However, these companies have not confirmed any association with the plant.
She said LGES could expand the plant’s potential production capacity in the future. The facility will use the latest technology and operate as a “smart factory,” according to the company. Using remote support, manufacturing intelligence, logistical automation and more, LGES plans to leverage the latest production technologies, combined with its battery mass production expertise, to “meet consumer demands in a stable manner and secure the company’s leadership in the North American battery market.”
“The Arizona plant could add more production capacity in the future as we see increased demand for cylindrical batteries from various customers, including automakers and power tool makers,” an LGES official said.
Automotive CEOs have called for increased cell availability as more companies embrace the transition to electric vehicles. Tesla CEO Elon Musk said earlier this week that cell availability will be the “limiting factor” for the next two to three years. In the company’s previous earnings calls, Musk and other Tesla executives mentioned that cell restrictions were the real obstacle to production. Although Tesla’s annual production has increased to nearly one million vehicles annually, The company has delayed several projectsincluding Cybertruck, as the availability of cells continues to limit the automaker’s ability to commit to new projects.
Musk confirmed that Tesla won’t release any new products in 2022, effectively delaying many new vehicles until 2023.
LG It raised more than $10 billion in an initial public offering in Korea in Januaryand announced many other battery projects with others Electric vehicle manufacturers such as General Motors and Stellantis.
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