LG Chem Commits $4.5 Billion To Expand EV Battery Production In U.S.

LG Energy Solution, the U.S. unit of LG Chem, plans to invest $4.5 billion to expand its U.S. electric vehicle battery manufacturing footprint with an additional 70 GWh of capacity from 2025 onward. As part of its Project Green Field, LG will expand capacity at its existing facility in Holland, Michigan, and build two more plants in the next four years. This comes on top of the two joint-venture plants it will operate with General Motors

GM
that are part of Ultium Cells LLC. 

LG plans to announce the locations of the two new facilities by June 2021. The current plant in Holland has a capacity of 5 GWh that will be expanded by adding new facilities on the same site as the first phase of the program. The first of the new factories is expected to be operational by 2023. The first of LG’s joint venture plants with GM is currently under construction in Lordstown, Ohio, and will have a capacity of 35 GWh. 

Combined, the three LG plants and the first Ultium plant will yield over 110 GWh of cells annually. At an average of 90-kWh per vehicle, that’s enough cells to supply more than 1.2 million battery electric vehicles per year. LG also confirmed that they are in planning with GM right now for a second Ultium Cells plant. Recent reports have indicated that the facility will likely be in Tennessee near GM’s Spring Hill assembly plant. That plant will begin production of the Cadillac Lyriq EV in early 2022. 

The plants in Holland and Lordstown will both be producing pouch cells of the type used in all of GM’s currently announced EVs as well as the Chrysler Pacifica plug-in hybrid and the Ford Mustang Mach-E (the LG cells for the Mach-E are currently sourced from an LG plant in Poland). LG pouch cells are also used in EVs from Jaguar, Audi and Porsche. 

The new plants will be capable of producing both pouch cells and cylindrical cells. LG currently supplies 2170 cylindrical cells for Tesla

TSLA
production in China and will supply Lucid Motors when it launches production in the second half of 2021. LG declined to say if they plan to produce the new larger 4680 cylindrical cells announced by Tesla at its September 2020 battery day. 

When asked during a conference call about moves by the Biden administration to try to reinforce the supply chain for batteries, LG responded that none of the materials for its U.S. market cells are currently sourced from China and it had no plans to do so in the future. 

With the significant expansion of electric vehicle availability over the next several years, two of the biggest challenges facing the industry are sourcing enough cells for the batteries and getting enough charging infrastructure to eventually support hundreds of millions of EVs. LG Chem is the latest to announce an expansion of US cell production and so far is set to be the largest supplier in North America. 

SK Innovation is also set to be a major player if it can settle its trade secrets dispute with LG. Panasonic already has a presence through its partnership with Tesla and may expand that either with Tesla or possibly with Toyota if the Japanese automaker decides to produce EVs in North America. GM, Ford and Stellantis have all now indicated plans to get into cell production and newcomers like Quantumscape and SES could become major players if they can work out how to mass produce their solid-state cells.