LG might not be the trendiest name in the technology industry. However, the South Korean company is a giant in several segments. Battery technology is one of them. On Thursday, Reuters reported that the company’s LG Energy Solution Division will invest $4.5 billion in U.S. battery production over the next four years.
It will use that money to build two production plants in undetermined locations. This will increase the United States’ battery production capacity by roughly 70GWh.
LG’s move comes in response to the sharp growth of the electric vehicle market. As more traditional automakers start producing their own electric cars, battery demand will skyrocket. Over the next several years, companies like LG will need to be ready to meet that need.
LG Energy Solution executive Denise Gray says, “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.”
When it comes to expanding battery production capacity, big investments are essential. For the U.S. market, it is always nice to see a manufacturer investing heavily in the domestic sector. LG notes that its two planned facilities will add around 4,000 jobs for the country as it continues to rebound from the COVID-19 pandemic.
Meanwhile, the construction of the facilities will create roughly 6,000 additional jobs over the next four years.
Gray tells Reuters that the company plans to select locations for its two plants in the first half of the year. Recently, LG has been developing a strong presence in the Midwest and Appalachian regions with new plants in both Ohio and Tennessee. At this point, the tech giant hasn’t hinted at where it may construct its new battery production facilities.
Evertiq reports that the plants will produce pouch cell batteries. These can be used in things like electric vehicles and energy storage systems. Both of these areas are in high demand right now and will be in the coming years. The plants will also produce cylindrical cell batteries for electric cars.
Focus on Green Vehicles
As noted, the growing demand for electric vehicles is a driving force behind LG’s planned investment in the U.S. battery production market. According to IHS Markit, global electric vehicle sales are expected to top 12.2 million by 2025. Comparatively, around 2.5 million green vehicles were sold in 2020.
With that in mind, it’s clear that there is big money in the electric vehicle space. However, these projections will only become reality if there are enough batteries to support manufacturers’ operations.
LG Energy Solution CEO Jong Hyun Kim said in a press release, “The goals of the U.S. president and automakers will be a propelling factor in the growth of the country’s electric vehicle and electric storage systems markets. LG Energy Solution is dedicated to expanding its battery production capacity and structuring a stable, localized supply chain that provides everything from R&D to production.”
Those are strong words that are a clear indication of LG’s plans for the future. For the electric vehicle industry, LG’s dedication is a good thing. The company’s two planned facilities will also be beneficial for the U.S. as a whole.