LG Energy Solution said on Thursday it plans to invest more than $4.5 billion in its U.S. battery production business through 2025 and add 4,000 jobs as it considers building at least two new U.S. plants.
The South Korean company is a unit of LG Chem.
LG said the investment will result in an additional 70GWh of U.S. battery production capacity.
The company declined to say where in the United States it is considering a new battery manufacturing plant, but said it would decide on the new location in the first half of the year.
Denise Gray, president of LG Energy Solutions Michigan unit, told Reuters that the investment would indirectly create another 6,000 jobs during construction and was being made to respond to the growing electric vehicle market.
"We are eager to expand our production capacity so that it can meet the needs of the numerous global automakers across the U.S. and Europe," Gray said.
LG and automaker General Motors have already committed to an investment of $2.3 billion in a joint venture battery factory in Ohio that will build GM's new Utium batteries for its future EVs. That plant is currently under construction.
The two companies are also in talks to build a $2 billion battery factory in Tennessee. A deal for the second factory could be announced as early as next week. Both companies have confirmed they are in discussions for the second factory.
"This is more about (having a) very proactive and preemptive investment plan prior to confirmation of demand from our customers," LG Energy Solution Senior Vice President Chang Seung-se said.
"By adding this capacity earlier, we can quickly respond to market demand and customers' orders," he told reporters.
Last week, LG told Korean reporters that it plans to build a U.S. factory where it would be able to make battery cells for Tesla, as well as for the company's energy storage systems. The plant will also supply batteries to other U.S. and global customers, as well as startups.
Although LG It did not name potential customers for its U.S. battery factory, one of the sources said it was hoping Tesla would buy its batteries, according to the Reuters report.
Over the past decade, LG Chem has become one of the world's biggest suppliers of EV batteries to the auto industry. The company stock has nearly doubled since June 2020 on growing demand for EV batteries.
LG's stock is up over 5% to 939,000 KRW (US$ 830.35) today after the reports of the planned battery factory.
LG is one of Tesla's battery suppliers for its China-made vehicles along with China's Contemporary Amperex Technology Co. Limited (CATL), while Japan's Panasonic builds batteries in a joint venture with Tesla for its US-built vehicles, which are exported around the world. CATL has a seperate supply deal with German automaker BMW.
The world's automakers are entering into supply deals with battery makers to ensure that they'll have the batteries needed to ramp up production of EVs over the next decade.
In addition to building batteries in a joint venture with GM, LG is supplying the batteries to luxury-electric vehicle startup Lucid Motors for the Lucid Air sedan which is being built at the company's new factory in Arizona that's nearing completion.
