SEOUL, South Korea—LG Energy Solution will invest more than $4.5 billion by the end of 2025 in the company’s U.S. business to expand its battery production capacity, the company said in a release.
The new investment will allow the company to create a total of more than 10,000 jobs for new LG employees and subcontractors while securing an additional 70GWh in the U.S. alone, and will be in addition to current and past investments, according to the release.
In addition to the Green Field Project, LG Energy Solution and GM are currently discussing plans to build a second joint venture plant in the U.S. that will further increase its cell production capacity. The second JV plant is expected to have a production capacity scale similar to the two companies’ first plant and is set to manufacture next generation EV cells based on advanced technology, the company said in the release.
LG Energy Solution developed these plans over the last year to rapidly mobilize its Green Field Project in a full-fledged effort to ensure its position in the growing U.S. electric vehicle (EV) market. The Green Field Project will provide the U.S. with a large-scale supply of environmentally friendly batteries to increase renewable energy sources across an array of industries, including electric vehicles, according to the release.
“The goals of the U.S. president and automakers will be a propelling factor in the growth of the country’s electric vehicle and energy storage systems markets,” stated Jong Hyun Kim, CEO of LG Energy Solution, in the release. “LG Energy Solution is dedicated to expanding its battery production capacity and structuring a stable, localized supply chain that provides everything from R&D to production. Through these commitments, the company aims to secure its leadership position as a strong, essential partner in the EV and ESS market and contribute to the success of the U.S. auto industry and economy.”
LG Energy Solution established its first U.S. research facility in 2000 and invested 600 million dollars to secure a production capacity of 5GWh at its first Michigan plant, built in 2012. In 2019, the company entered into a joint venture with General Motors (GM) to construct a $2.3 billion battery plant in Ohio, slated for completion in 2022, to create an annual capacity of 35GWh. The latest Green Field Project will give the company a total production capacity of more than 110GWh in the U.S., according to LG Energy Solution.
Regarding direct employment of new LG employees, the company will spike its current job count to 4,000 new jobs through these new commitments. This is in addition to the 1,400 jobs in Michigan and 1,100 jobs through its GM joint venture plant in Ohio. This is a total of 6,500 direct LG jobs in the U.S., the company said.
The company intends to use regional subcontractors in tandem with the additional production capacity expansion to strengthen the local economies at the new facility. This action is expected to generate more than 6,000 additional new jobs through subcontractors alone, according to the release.
Within the first half of 2021, LG Energy Solution will select at least two location candidates for its factory intended to manufacture various types of batteries in the United States. This will be followed by a meticulous board review before making final decisions, the company said.
The new LG Energy Solution facility will produce pouch cell batteries to be used in EVs and energy storage systems (ESS), as well as cylindrical cell EV batteries that are currently rapidly increasing in demand. According to LG Energy Solution, it is the first and only battery company to hold the experience and technology to mass produce these products.
All new LG Energy Solution plants in the U.S. will operate using 100 percent renewable energy, reinforcing the company’s dedication to its Green Field Project. In the second half of last year, the Michigan battery plant began running entirely on renewable energy.
As the pressure for domestic production for EV components is heavily increasing in the U.S., LG Energy Solution is eager to expand its production capacity so that it can meet the needs of numerous global automakers across U.S. and Europe. In addition to partnering with large global companies, LG Energy Solution is also currently receiving battery supply orders from various ESS and EV startups in the U.S., the company said.
Through these investment plans, LG Energy Solution aims to alleviate the industry concerns around battery supply sufficiency and accelerate the process of expanding its position in the United States. The company said in the release that it will also “build solid and stable U.S-based supply chains that provide an extensive range from research to product development and production, as well as the procurement of raw components.”