LG Energy Solution Ltd. and General Motors Co., plan to build the third US electric vehicle battery plant in Michigan with a $2.6 billion investment to meet growing demand in North America, the world’s fastest-growing electric vehicle market.
Ultium Cells LLC., a joint venture between LG Energy and GM, on Tuesday unveiled the plan to set up the factory in Lansing with a capacity of up to 50 gigawatt hours (GWh), enough for 700,000 EVs that can drive 500 kilometers on a full charge.
The JV is scheduled to break ground later this year and complete the construction in the second half of 2024. The plant is scheduled to start mass production of the first phase in early 2025.
"Our third battery manufacturing plant, fittingly located in America's automotive heartland, will serve as a gateway to charge thousands and later millions of EVs in the future," said Kwon Young-soo, CEO of LG Energy, the world’s second-largest battery maker.
Ultium is currently building two 35 GWh battery plants, one in Ohio and the other in Tennessee. The Ohio factory is scheduled to commence operations this year and the Tennessee facility is to start production in 2023. LG Energy and GM plan to expand their capacity.
FASTEST GROWING EV MARKETSuch aggressive expansion came as North America is the fastest-growing EV market. The regional market of batteries for EVs and plug-in hybrid vehicles is expected to grow an average of 58% a year to 143 GWh in 2023 and 286 GWh in 2025 from 46 GWh this year, according to market researcher IHS Markit.
GM is aggressively investing to become the top player in North America’s EV market. The No. 1 US automaker announced a plan to spend more than $7 billion, the single largest investment in its history, in four Michigan manufacturing sites to increase battery cell and electric truck manufacturing capacity.
"Today we are taking the next step in our continuous work to establish GM’s EV leadership by making investments in our vertically integrated battery production in the U.S., and our North American EV production capacity,” said GM Chair and CEO Mary Barra.
LG Energy has been increasing investment to expand its presence in the market.
The South Korean company is launching a JV with the world’s No. 4 carmaker Stellantis N.V. to build a battery manufacturing facility in the US. The JV is looking for a site for a plant with a 40 GWh capacity, aiming to break ground in the second quarter and start production in the first quarter of 2024.
LG Energy plans to invest more in North America to
add its own production capacity by 40 GWh, raising its total capacity in the region to 200 GWh.
Write to Kyoung ju Kang at
qurasoha@hankyung.comJongwoo Cheon edited this article.
