LG Energy Solution to Build 4th Plant with GM... Accelerating Overseas Investment

Bara GM Chairman "Announcement of Plant 4 Location in the First Half of the Year"

The construction site of the Ultium Cells battery plant in Ohio, USA, a joint venture between LG Energy Solution and General Motors (GM) for electric vehicles. (Photo by LG Energy Solution)

[Asia Economy Reporter Moon Chaeseok] LG Energy Solution and the United States' largest automobile company General Motors (GM) are building a fourth battery joint plant. This comes after announcing the groundbreaking plan for the third plant at the end of last month and revealing plans to build a fourth plant. The pace of LG Energy Solution's entry into the North American market, the central axis of its 'Global Pentagon Production System' spanning Korea, the United States, China, Europe (Poland), and Indonesia, is expected to accelerate.

According to industry sources, Mary Barra, GM Chairwoman, said during the Q4 earnings conference call on the 1st (local time), "We plan to announce the location of the fourth battery joint plant in the first half of this year," adding, "We will continue to cooperate with LG and announce the plan for the fourth plant soon." An LG Energy Solution official also stated, "Although nothing has been concretely decided regarding the fourth joint plant, we are continuously discussing ways to strengthen cooperation between the two companies, including the fourth plant, due to the recent growth in electric vehicles and high demand for GM's upcoming electric vehicles."

The two companies established the electric vehicle battery joint venture Ultium Cells in 2019 and have been expanding production plants. They are constructing the first plant (over 35GWh) in Ohio and the second plant (over 35GWh) in Tennessee. The first plant will begin mass production this year, and the second plant will start next year. At the end of last month, they announced an investment of $2.6 billion (approximately 3.1 trillion KRW) to build a third battery plant in Michigan, USA. The two companies plan to expand the production capacity of the third plant to 50GWh. The goal is to start construction this year and begin the first phase of mass production in 2025.

LG Energy Solution has established production lines in 'Korea-North America-China-Poland-Indonesia'. (Source: LG Energy Solution)

Following the announcements of the first to third plants, the announcement of the fourth plant is expected to further accelerate LG Energy Solution's entry into the North American market, the central axis of its global pentagon production system. LG Energy Solution has previously stated plans to have a production capacity of 442GWh by around 2025 in Korea, the United States, China, Europe (Poland), and Indonesia. Although there has been no mention of the production capacity of the fourth plant, if the plant is actually constructed, the production capacity target could exceed 442GWh.

After announcing the groundbreaking plan for the third plant, Kwon Young-soo, Vice Chairman and CEO of LG Energy Solution, said, "The Ultium Cells third joint plant, located in the heart of the U.S. automotive industry, will serve as a gateway to the production of millions of electric vehicles in the future," adding, "Together with GM, with whom we have built a long-term cooperative relationship, we will contribute to the transition to the electric vehicle era in the United States."

GM is continuing its investments with the goal of achieving the number one market share in the North American electric vehicle market by 2025. GM plans to launch more than 30 electric vehicle models by 2025 and convert all production vehicles to electric by 2035. According to market research firm IHS, the North American electric vehicle market size is expected to grow sharply from 46GWh last year to 143GWh in 2023 and 286GWh in 2025.

This content was produced with the assistance of AI translation services.