LG Energy Solution in Michigan secures $1.36B for EV battery production
LG Energy Solution's Michigan office has secured $1.36 billion for investment into production facilities for electric-vehicle batteries in North America by 2024, the company confirmed Monday.
The funding is a part of the plan from the batteries unit of South Korea-based LG Corp. to expand its solely owned annual production capacity in North America from its current 5 gigawatt-hours in Holland, an LG spokesperson said in an email. It wasn't clear if Michigan will see any of the investment, which was disclosed Friday in a regulatory filing in Korea.
Add LG Energy Solution to the list of companies from General Motors Co., Stellantis NV and Toyota Motor Corp. to EV startup Rivian Automotive Inc. that are looking for property in the United States to build plants that will power next-generation vehicles.
The Detroit News previously reported LG owns a vacant 40-acre parcel adjacent to its current battery cell plant in Holland. An expansion there could be a major boon to the home state of the Motor City, whose leaders want to ensure Michigan stays at the forefront of the automotive industry's move toward electric cars, especially after homebred Ford Motor Co. opted for sites in Kentucky and Tennessee for new battery plants and an EV assembly plant.
LG Energy Solution, which filed for an initial public offering on the Korea Exchange in June and awaits approval, will raise $681 million in fresh capital and borrow the other half, according to the filing.
"Through the capital increase, we plan to use it as an investment fund to respond to the increase in demand for electric vehicle batteries and (energy storage systems) in the North American market," the company said in the filing. "We plan to invest billions of dollars."
LG in March pledged to spend $4.5 billion by 2025 to increase its battery production capacity in the United States to reach an annual rate of 70 gigawatt-hours, adding 10,000 jobs. It also has joint ventures to produce batteries with GM and Stellantis, the maker of Jeep and Ram vehicles.
A new plant in Lordstown, Ohio, is under construction for Ultium Cells LLC, the joint venture between GM and LG. The 30-gigawatt-hour plant is slated to open early next year. The companies also are investing into a second plant in Spring Hill, Tennessee. Two more are planned, though their locations haven't been disclosed.
In October, Stellantis announced it was pursuing a joint venture with LG for a 40-gigawatt-hour plant in North America to begin production in the first quarter of 2024. A location is under review, according to the companies.
At LG's Holland plant, the company recently resumed production of batteries for the Chevrolet Bolt electric vehicles after a manufacturing defect led to a recall of every Bolt produced. The plant also produces batteries on a separate line for the Chrysler Pacifica Hybrid minivan.
In September, Michigan missed out on Ford's $11.4 billion investment for EV assembly and battery production in Tennessee and Kentucky. The plan is expected to create 11,000 new jobs, a loss that highlighted Michigan's comparatively high industrial power costs, its lack of mega ready-to-build tracts and its difficulty quickly mustering financial incentive packages that can help close big deals.