LG Energy Solution Expands Battery Territory, Continues Investment in North American Plant

GM Joint Venture Ultium Cells Announces Additional 360 Billion KRW Investment
Expected to Exceed 300 GWh by 2025

LG Energy Solution, which is expanding its "battery territory" in North America, continues to invest in new factories despite high interest rates and high exchange rates. It is expected to build factories with a capacity exceeding 300GWh by 2025.

According to the industry on the 5th, Ultium Cells, a joint venture between LG Energy Solution and U.S. automaker GM, decided to invest an additional $275 million (about 360 billion KRW). This investment aims to increase the production capacity of the battery factory to be built in Spring Hill, Tennessee, by about 40%. Through this investment, the battery production capacity of Ultium Cells' Plant 2 will increase from the initially announced 35GWh to 50GWh. Ultium Cells is also expected to create about 1,700 jobs, approximately 400 more than originally planned. Previously, Ultium Cells had decided to invest $2.3 billion (about 3 trillion KRW) to build the Spring Hill factory.

North America has become a "black hole" of the global electric vehicle market following the implementation of the Inflation Reduction Act (IRA). Investments are continuing not only in complete electric vehicle factories but also in the automotive electronics sector and battery supply chains, all centered in North America. In particular, battery production plants, which account for more than 40% of the price of electric vehicles, are a prerequisite for electric vehicle production.

Currently, LG Energy Solution is building battery factories one after another in Indonesia, the U.S., Canada, and other locations in partnership with GM, Stellantis, and Honda. There are a total of seven confirmed factory investments, with a scale of 261GWh by 2025. LG Energy Solution and GM are also reportedly considering the construction of a fourth plant. Additionally, Hyundai Motor Group is known to be considering establishing a joint venture with LG Energy Solution in the U.S., following SK On. The industry expects the joint factory of the two companies to have a battery production capacity of up to 70GWh.

When the sizes of the battery factories currently under review are combined, LG Energy Solution's production capacity is expected to exceed 300GWh by 2025. Considering that 300GWh can typically supply batteries for 150,000 electric vehicles with 10GWh, this scale could be applied to 4.5 million vehicles annually. Although it will take more than 2 to 3 years to improve manufacturing yield (good product rate) and increase factory operating rates, North American battery production is expected to flourish after 2025.

2025 is the inaugural year predicted for explosive growth in the North American electric vehicle market. This is because it coincides with the enforcement of the United States-Mexico-Canada Agreement (USMCA), a trade agreement that exempts tariffs only if more than 75% of automotive parts are produced locally in North America, alongside the Inflation Reduction Act.

In fact, LG Energy Solution's battery usage in the North American region is already showing an upward trend. From January to October this year, LG Energy Solution sold 10.1GWh of batteries in North America, a 24% increase compared to the same period last year, ranking second in market share (18%). The first place was held by Japan's Panasonic, which sold 27.1GWh.

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