3 trillion won in Michigan to be completed in 2024
Ahead of today’s listing, aggressive investment moves
Annual production of 700,000 high-performance electric vehicles
Under the threat of internalizing batteries in finished cars
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Biden welcomes “manufacturing return signal”
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LG Energy Solutions and General Motors (GM), the No. 1 automaker in the US, will jointly invest 3 trillion won to build the third joint plant in the US. Ahead of its listing on the 27th, it has made a huge investment in the rapidly growing North American electric vehicle market. It is also interpreted as a move to respond to the increasingly fierce market competition, such as the internalization of batteries by automakers.
LG Ensol announced on the 25th (local time) an investment plan for the establishment of a third joint plant of Ultium Cells, a joint venture between the two companies, in Lansing, Michigan, USA. The investment amount is 2.6 billion dollars (about 3 trillion won), and construction is expected to be completed in the second half of 2024.
LG Ensol and GM are maintaining such a strong partnership that they are often called ‘electric vehicles’. Earlier, it announced the establishment of a first plant in Ohio and a second plant in Tennessee. The planned production capacity of the 3rd plant to be built in Michigan this time is 50 GWh, which is enough to produce 700,000 high-performance pure electric vehicles that can travel more than 500 km on a single charge. It is known that the two companies are preparing to establish a fourth plant following the third plant.
LG Ensol Vice Chairman Kwon Young-soo said, “The 3rd joint plant of ‘Ultium Cells’, located at the heart of the American automobile industry, will serve as a gateway to the birth of millions of electric vehicles in the future. We will contribute to the transition to the electric vehicle era,” he said.
The reason LG Ensol chose the US as a large-scale investment destination is the rapid growth of the North American electric vehicle market. According to IHS, a global market research company, the North American electric vehicle battery market is expected to grow more than sixfold from 46.1 GWh last year to 285.8 GWh in 2025. Also, the US government is expected to expand and apply the ‘Local Purchase Priority Act’. American automakers are demanding that batteries be manufactured ‘in the US’. The Homemade Purchase Priority Act is a bill that provides US workers with tax benefits on products manufactured in the US, so Ultium Cells’ third plant can also receive this benefit. In addition to GM, LG Ensol has also confirmed the establishment of a joint venture with US Stellantis, the world’s fourth-largest automaker, and is currently selecting a plant site. If this plant goes into operation, LG Ensol will have a total production capacity of 200GWh or more in the US alone in the future.
In addition to explosive growth in the electric vehicle market, fierce competition is expected. Major automakers such as Volkswagen and Tesla are pursuing an internalization strategy to have a system that produces batteries directly instead of receiving batteries from other companies. If they succeed in internalizing them, they pose a significant threat to battery-specialized companies such as LG Ensol. The purpose of battery companies strengthening partnerships with global automakers is to diversify their customer portfolios in preparation for such a situation. In addition to GM and Stellantis, LG Ensol is also promoting collaborations with Hyundai and Honda.
US President Joe Biden also issued a statement welcoming the collaboration between the two companies. “Over the past year, more than $100 million has been invested in the U.S. auto sector to manufacture electric vehicles and batteries,” Biden said. said
By Oh Kyung-jin