LG Energy Solution Ltd. said it would invest about $5.6 billion in a battery-manufacturing complex in Arizona, the latest in a string of new plants by foreign companies as the U.S. transitions toward cleaner fuels.
The amount is about four times larger than what the firm had initially pledged when it first revealed plans last year to manufacture cylindrical batteries for electric vehicles in Arizona.
LG Energy’s announcement comes as battery makers have been pushing to build up a bigger production base in the U.S., which is looking to strengthen its local supply chains and reduce reliance on China while speeding up shifts to green technologies.
LG Energy said the Arizona plant will meet the eligibility requirements of the EV tax-credits program under the IRA.
The EV tax-credits program has stoked complaints from foreign car makers but has opened business opportunities for non-Chinese battery players including South Korea’s LG Energy, Samsung SDI Co. and SK On Co. as well as Japan’s Panasonic Holdings Corp., which have all announced plans for new manufacturing plants in the U.S., including many via joint partnership with auto makers.
LG Energy is the world’s second-largest producer of EV batteries after China’s Contemporary Amperex Technology Co., and has been seeking growth in the U.S., where it has seen a boost from Washington’s legislation intended to subsidize clean-energy industries and to reduce economic dependence on China.