LG Energy Solution Invests IDR 19.9 Trillion To Build Battery Factory In Arizona

Illustration of LG Energy Solution. (ANTARA/REUTERS/Kim Hong-ji)

JAKARTA - LG Energy Solution (LGES), a supplier to electric car makers Tesla and Lucid, said that it plans to invest 1.7 trillion Korean won (approximately Rp. 19.9 trillion) to build a battery factory in Arizona, United States by 2024.

This was done in order to meet the demands of "leading startups" and other North American customers.

It will be the first US factory to make cylindrical cells, the type of battery already used in Tesla and Lucid vehicles, LGES said.

Construction will begin in the second quarter of 2022, with mass production set to begin in 2024 with a production capacity of 11 gigawatt hours, LGES said in a statement.

Previously, Reuters reported that potential customers would include EV makers Tesla, Lucid and Proterra as well as Philip Morris PM.N. The report cites people familiar with the matter.

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

"The Arizona plant may add further production capacity in the future as we see increasing demand for cylindrical batteries from a wide range of customers, including automakers and power tool makers," an official at LGES said.

Tesla Chief Executive Officer Elon Musk said battery production would be a "limiting factor" for vehicle production in two to three years. He has asked suppliers to increase production, while Tesla is starting to build its own cells.

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

LG Energy Solution, which raised more than $10 billion in an initial public offering in Korea in January, has announced a series of battery joint ventures with GM and Stellantis in the United States and Canada.