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Tesla, Lucid supplier LGES plans to build a $1.4 billion battery factory in Arizona

Tesla, Lucid supplier LGES plans to build a $1.4 billion battery factory in Arizona

An employee walks past the LG Energy Solution logo at its office building in Seoul, South Korea, November 23, 2021. REUTERS/Kim Hong Ji/File Photo

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SAN FRANCISCO/SEOUL, March 23 (Reuters) – LG Energy Solutions (373220.KS) (LGES), a supplier to electric car makers Tesla and Lucid, said Thursday in Korea that it plans to invest 1.7 trillion won ($1.4 billion) to build a battery plant in Arizona by 2024 to meet demand from “high-profile start-ups” and others. North American customers.

LG said this would be the first US factory to produce cylindrical cells, a type of battery that has been used in Tesla and Lucid cars. LGES said in a statement that construction will begin in the second quarter of 2022, and mass production will begin in 2024, with a production capacity of 11 gigawatt-hours.

Earlier, Reuters reported that potential customers will include electric car makers Tesla, Lucid, Protera and Philip Morris. (From), maker of hot tobacco sticks IQOS, among others. The report cited people familiar with the matter.

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LGES said in a statement that it plans to consider securing additional production capacity at its plant in Arizona in the future.

“The Arizona plant could add more production capacity in the future as we see increased demand for cylindrical batteries from various customers, including automakers and power tool makers,” a LGES official said.

On Tuesday, Tesla CEO Elon Musk said battery production would be the “limiting factor” for car production within two to three years. Read more called on suppliers to ramp up production, while Tesla started making the cells himself.

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Tesla, Lucid and Protera did not immediately respond to requests for comment. Philip Morris declined to comment.

Japanese company Panasonic (6752 T)a supplier of Tesla, together with the contemporary Amperex Technology Co Ltd (300750.SZ)It is also looking to invest billions of dollars to build a plant to produce a new type of electric vehicle (EV) battery for Tesla, public broadcaster NHK reported this month.

NHK reports that Panasonic is looking into building the plant in Oklahoma or Kansas, not far from the new Tesla Automobile plant in Texas.

Lucid’s chief financial officer Sherry House told Reuters last month that the company, which has a car plant in Arizona, has signed multi-year supply agreements with two battery suppliers, and the agreement “has some capacity coming from its state cell lines.”

Companies are not specified. Lucid sources batteries from LGES and Samsung SDI.

LGES, which raised more than $10 billion in its initial public offering in Korea in January, has announced a series of battery joint ventures with General Motors. (GM.N) and Stellantis (STLA.MI) in the United States and Canada. Read more

In August, US President Joe Biden signed an executive order aimed at making half of the new cars sold in 2030 electric.

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Reporting from Hyunjoo Jin and Heekyong Yang. Editing by Jane Merriman, David Gregorio and Bernard Orr

Our criteria: Thomson Reuters Trust Principles.