LG reviews $1.3 bn investment for Arizona battery plant

LG Energy Solution

LG Energy Solution, a supplier to U.S. EV carmakers including Tesla, will review its $1.3 billion investment plan for setting up an EV battery factory in Arizona due to economic conditions, Reuters news report said.

LG Energy said in a news statement it was reviewing investment options due to the unprecedented economic conditions and investment circumstances in the United States.

LG Energy did not mention the Arizona plant. LG Energy spokesperson said the company would re-evaluate its investment in the standalone factory.

Elsewhere in the United States, LG Energy is building three plants with General Motors in Ohio, Tennessee and Michigan and plans to expand its existing factory in Michigan.

LG Energy has also production sites in South Korea, China, Poland, Canada and Indonesia.

“At this point, it would be unlikely for LGES to withdraw its Arizona investment, the company needs to reassess its profitability forecast amid rising cost due to inflation,” said Cho Hyun-ryul, an analyst at Samsung Securities.

LG Energy said in March the Arizona plant would be its first U.S. factory to make cylindrical cells, a type of battery that has been used in Tesla and Lucid vehicles. LG Energy was planning to start construction in the second quarter of 2022, with mass production to start in 2024.