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LG Energy Solutions’ $5.54 Billion Investment: Pioneering Battery Production in Arizona to Dominate North American EV and ESS Market

LG Energy Solutions is advancing its plans for a battery plant in Arizona, USA, after a year of reassessing the project due to global uncertainty. The investment is approximately $5.54 billion, marking it as the largest ever. The plant will manufacture batteries for electric vehicles and energy storage systems (ESS), including lithium iron phosphate (LFP) batteries, which were predominantly produced in China.

On March 24th, LG Energy Solutions announced that they would construct a new facility in Queen Creek, Arizona, specializing in cylindrical, ESS, and LFP batteries. The production capacity will be 43 gigawatt hours (GWh), establishing it as the largest independent battery production plant in North America.

The Arizona battery plant project, under review since June of the previous year, has now resumed with an increased investment of approximately $3.23 billion and a production capacity of 27 GWh. Construction is set to commence this year, with completion and mass production targeted for 2025. The capacity will suffice to produce 350,000 high-performance electric vehicles.

According to LG Energy Solutions, the US Inflation Reduction Act (IRA) has led to a significant surge in demand for high-quality, high-performance batteries in North America, prompting the company to respond proactively.

LG Energy Solutions is also the first global battery enterprise to establish a dedicated ESS battery production plant. With a total investment of around $2.31 billion, the 16 GWh facility will produce pouch-type LFP batteries, independently developed by LG Energy Solutions. Construction is slated to begin this year, with mass production aimed for 2026.

As nations expand support for renewable energy policies, the global ESS market is predicted to experience rapid growth, with the North American market at the forefront.

The new Arizona plant will allow LG Energy Solutions to secure a total of seven production bases in North America and diversify its product portfolio. By expanding its product range to include electric pouch and cylindrical batteries, as well as ESS and LFP batteries, the company will boast the most diverse product portfolio among battery manufacturers in North America.

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