Tesla supplier LGES plans to build $1.4 bln battery factory in Arizona (updated)

LG

23/03/2022 21:43

(Adds LGES announcement)
    By Hyunjoo Jin and Heekyong Yang
    SAN FRANCISCO/SEOUL, March 23 (Reuters) - LG Energy Solution
 373220.KS  (LGES), a supplier for electric car makers Tesla and
Lucid, said on Thursday in Korea it plans to invest 1.7 trillion
Korean won ($1.4 billion) to build a battery factory in Arizona
by 2024 to meet demand from "prominent startups" and other North
American customers. 
    This will be its first U.S. factory to make cylindrical
cells, a type of battery that has been used in Tesla and Lucid
vehicles, LGES said. Construction will begin in the second
quarter of 2022, with mass production to start in 2024 with
production capacity of 11 gigawatt hours, LGES said in a
statement.
    Earlier, Reuters reported that potential customers would
include EV makers Tesla, Lucid and Proterra and Philip Morris
 PM.N , maker of IQOS heated-tobacco sticks, among others. The
report cited people familiar with the matter.    
    On Tuesday, Tesla CEO Elon Musk said battery production
would be "the limiting factor" for vehicle production in two to
three years. urn:newsml:reuters.com:*:nL2N2VP0GW He has called on suppliers to raise
production, while Tesla starts making cells itself. 
    Tesla, Lucid and Proterra did not immediately respond to
request for comment. Philip Morris declined to comment. 
    Japan's Panasonic Corp  6752.T , one of Tesla suppliers,
along with Contemporary Amperex Technology Co Ltd  300750.SZ ,
is also looking to invest billions of dollars to build a factory
to make a new type of electric vehicle (EV) battery for Tesla,
public broadcaster NHK reported this month.
    Panasonic is looking at building the factory in either
Oklahoma or Kansas, not far from Tesla's new Texas vehicle
plant, NHK reported.
    Lucid CFO Sherry House told Reuters last month the company,
which has a car factory in Arizona, had signed multi-year supply
agreements with two battery suppliers, and the agreement "does
have some capacity coming from state-side cell lines."
    She did not identify the companies. Lucid sources batteries
from LGES and Samsung SDI. 
    LGES, which raised more than $10 billion in its initial
public offering in Korea in January, has announced a flurry of
battery joint ventures with GM  GM.N  and Stellantis  STLA.MI 
in the United States and Canada.  urn:newsml:reuters.com:*:nL2N2VQ0I8  urn:newsml:reuters.com:*:nL1N2U7021
    In August, U.S. President Joe Biden signed an executive
order aimed at making half of all new vehicles sold in 2030
electric.

 (Reporting by Hyunjoo Jin and Heekyong Yang. Editing by Jane
Merriman and David Gregorio)
 ((hyunjoo.jin@thomsonreuters.com; 82-2-3704-5685; Reuters
Messaging: hyunjoo.jin.thomsonreuters.com@reuters.net))