The Mercury News

LG to build battery factory in Arizona

Company will spend $5.5 billion for plant in Phoenix area

- By Niraj Chokshi

A South Korean battery manufactur­er said it would quadruple its planned investment in a new factory in Arizona to meet growing demand from automakers trying to ramp up production of electric cars and trucks.

The company, LG Energy Solution, said it would invest $5.5 billion to build the manufactur­ing complex near Phoenix, where it plans to make batteries for electric vehicles in 2025 and for energy storage systems the following year.

LG said its decision was driven in part by the Inflation Reduction Act, which became law in August and included federal incentives for the sale and production of electric vehicles and batteries in the United States. One of the world's largest makers of batteries for electric cars and energy storage devices, LG's customers include General Motors, Ford Motor, Honda and Tesla.

“We believe it's the right move at the right time in order to empower clean energy transition in the U.S.,” Youngsoo

Kwon, the company's chief executive, said in a statement.

The announceme­nt represents the latest multibilli­on dollar investment by battery and auto companies since President Joe Biden signed the Inflation Reduction Act.

Last month, Ford said it would build a $3.5 billion battery factory in Michigan, where it would use technology and services provided by the world's largest battery manufactur­er, the Chinese company Contempora­ry Amperex Technology Co. Limited, known as CATL. Ford is also building battery plants in Kentucky and Tennessee with another Korean company, SK On.

In December, the Department of Energy said it would loan $2.5 billion to Ultium Cells, a joint venture owned by General Motors and LG, to build battery factories in Ohio, Tennessee and Michigan. Honda and LG are also investing $3.5 billion to build a battery plant in Ohio together.

A wave of new factories is expected to increase battery manufactur­ing capacity in North America tenfold from 2021 to 2030, according to a recent report from the Argonne National

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