LG Energy Solution Accelerates US Investment with GM... Announces 4th Plant Less Than 10 Days After 3rd Plant Reveal

'US-centered Korea-China-Europe-Indonesia pentagonal system... Maximizing production capacity'

LG Energy Solution electric vehicle battery factory in Michigan, USA. (Photo by LG Energy Solution)

[Asia Economy Reporter Moon Chaeseok] LG Energy Solution is accelerating the construction of its U.S. factory to maximize production capacity. As it establishes a production system spanning the U.S., Asia, and Europe, it is creating an environment for reducing logistics costs and implementing localization strategies, laying the foundation to secure economies of scale, which is being positively evaluated.

According to industry sources, LG Energy Solution and the largest U.S. automaker General Motors (GM) have decided to build a fourth joint battery plant. GM Chairwoman Mary Barra 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." This announcement came less than ten days after officially announcing the groundbreaking plan for the third plant on the 26th of last month, signaling plans for the fourth plant to the market.

LG Energy Solution's global five-point production system. It covers Korea, China, Poland, and Indonesia, centered on North America. (Source: LG Energy Solution)

Accordingly, 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 U.S., China, Europe (Poland), and Indonesia, is expected to accelerate. LG Energy Solution has announced plans to have a production capacity of 442GWh by around 2025 in Korea, the U.S., 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. The key is the U.S. Since establishing the electric vehicle battery joint venture Ultium Cells in 2019, the two companies have been expanding production plants in the U.S. 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 next year. At the end of last month, they announced plans to invest a total of $2.6 billion (approximately 3.1 trillion KRW) to build a third battery plant in Michigan, U.S. 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.

Kwon Young-soo, Vice Chairman and CEO of LG Energy Solution. (Photo by LG Energy Solution)

After announcing the groundbreaking plan for the third plant at the end of last month, Kwon Young-soo, Vice Chairman and CEO of LG Energy Solution, said, "The third joint plant of Ultium Cells, located in the heart of the U.S. automotive industry, will serve as a gateway to producing millions of electric vehicles in the future," adding, "We will contribute to the transition to the U.S. electric vehicle era together with GM, with whom we have built a long-standing cooperative relationship." GM is also continuing investments aiming to achieve 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.