[Asia Economy Reporter Kim Hyewon] LG Energy Solution will invest more than 5 trillion KRW in the U.S. battery industry by 2025. Riding on the momentum of the Biden administration's Green New Deal policy, which is expected to accelerate the transition to electric vehicles, the company has decided to make a large-scale preemptive investment in eco-friendly industries.
On the 12th, LG Energy Solution announced plans to build more than two electric vehicle battery production plants in the U.S. through investments exceeding 5 trillion KRW by 2025. This investment is separate from the second plant of the joint venture with General Motors (GM). Including the GM second plant announced on the same day, the total new investment in the U.S. amounts to about 7 trillion KRW. ▶Related article page 5
With this investment, LG Energy Solution will independently secure an additional battery production capacity of over 70GWh in the U.S., increasing the total production capacity to 75GWh when combined with the existing Michigan plant (5GWh). The new plants alone are expected to create more than 10,000 new jobs, including approximately 4,000 direct employees and about 6,000 workers involved during the construction period.
Notably, this new investment marks LG Energy Solution's entry into the cylindrical battery sector for electric vehicles in the U.S., in addition to pouch batteries for electric vehicles and energy storage systems (ESS). Currently, LG Energy Solution's cylindrical battery plants are only located in Korea and China, making this the first time the company will build a related plant in the U.S.
LG Energy Solution plans to select at least two candidate sites in the first half of this year and then proceed with full-scale investment. Although the candidate sites are not yet determined, the Biden administration's active efforts to attract foreign capital are expected to result in a series of "love calls," including various incentives.
The company is also accelerating additional investments in the joint venture with GM. The second plant, whose site will be decided within the first half of this year, will have a similar investment scale (in the high 2 trillion KRW range) as the first plant and will produce batteries applying next-generation advanced technologies.
Kim Jonghyun, CEO of LG Energy Solution, emphasized, "The U.S. Green New Deal policy will accelerate growth not only in electric vehicles but also in the ESS market. We will preemptively secure battery production capacity and establish a localized, stable supply chain system from research and development (R&D) to production, contributing to the success of the U.S. Green New Deal policy as the best partner in the U.S. market."
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