Storage

LG to build $5.5 billion battery plant in Arizona

LG to build $5.5 billion battery plant in Arizona
(Photo: Kārlis Dambrāns/Flicker Creative Commons)

LG Energy Solutions plans to invest $5.5 billion to build a battery storage manufacturing plant in Arizona that the company said would be the largest in North America.

Once completed, the factory would have the capacity to manufacture 27 GWh of cylindrical batteries for electric vehicles and 16 GWh of lithium-iron phosphate batteries for energy storage systems. The two verticals are expected to begin production in 2025 and 2026, respectively.

The company said it is making the investment in U.S. manufacturing to meet the needs of customers seeking incentives within the Inflation Reduction Act. The facility, which will consist of two separate manufacturing plants, will be built in Queen Creek, southeast of Phoenix.

GO DEEPER: Check out the Factor This! energy storage podcast playlist, including episodes on battery storage, long-duration energy storage, gravity storage, and more. Subscribe wherever you get your podcasts.

LG is doubling down on an announcement made last year when the company said it would invest $1.3 billion to manufacture EV batteries at the same location.

The addition of a manufacturing line for standalone energy storage should be welcome news to energy storage developers, who are in constant competition with the EV market for battery supplies.

“Our decision to invest in Arizona demonstrates our strategic initiative to continue expanding our global production network, which is already the largest in the world, to further advance our innovative and top-quality products in scale and with speed,” said Youngsoo Kwon, CEO of LG Energy Solution. “We believe it’s the right move at the right time in order to empower clean energy transition in the U.S.”

LG expects to break ground on both facilities sometime this year.