Korean battery giant LG announces huge expansion of plans for battery factory in Queen Creek

An artist's rendering shows some of the buildings planned at LG Energy Solution's battery manufacturing plant in Queen Creek.
An artist's rendering shows some of the buildings planned at LG Energy Solution's battery manufacturing plant in Queen Creek.

LG Energy Solution said it will quadruple its initial budget for a battery manufacturing plant in Queen Creek and now plans to spend $5.5 billion for the project, which will create thousands of jobs and could become the largest stand-alone battery complex in North America.

The South Korean company’s lithium-ion batteries power electric vehicles, mobility devices, information technology services and energy-storage services. The complex will consist of two manufacturing facilities — one for cylindrical batteries for electric vehicles and another for lithium iron phosphate batteries for energy storage systems. Production is expected to start in 2025. (Lithium ion and lithium iron phosphate are two distinct types of batteries.)

LG Energy Solution said demand for batteries is surging, and the company expects its 2023 revenue to increase by 25% to 30%. The company attributed the demand increase in part to federal tax credits in the Inflation Reduction Act, which was passed by Congress last year.

The announcement didn't specify the number of jobs, types of positions or when hiring will start, but Arizona Gov. Katie Hobbs said the invesment will mark Arizona as the "battery manufacturing capital of the country," cementing the state's reputation as "an innovation hub for renewable energy.”

The $5.5 billion figure is nearly four times LG's initial announcement of a $1.4 billion investment for the Queen Creek complex, disclosed last April. The company plans to invest $3.2 billion for EV batteries and $2.3 billion for “pouch type” lithium iron phosphate batteries for energy storage systems.

LG's electric vehicle customers include Tesla and Lucid, which builds its vehicles in Casa Grande.

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Company expanding U.S. investments

LG, which employs about 34,000 people globally, also recently broke ground on a major battery-manufacturing project in Ohio in conjunction with Honda.

“Our decision to invest in Arizona demonstrates our strategic initiative to continue expanding our global production network, which is already the largest in the world, to further advance our innovative and top-quality products in scale and with speed,” said Youngsoo Kwon, CEO of LG Energy Solution, in a prepared statement.

An artist's rendering shows the security building planned for the LG Energy Solution plant in Queen Creek.
An artist's rendering shows the security building planned for the LG Energy Solution plant in Queen Creek.

President Biden claimed credit for the investment.

"LG Energy is building a new electric battery manufacturing facility in Arizona — the largest investment in a single battery facility in North America— because of my economic plan," he said in a prepared statement. "For far too long, we outsourced jobs and manufacturing, and imported goods, while the future was made elsewhere. Because of my Investing in America agenda, we’re finally making the future in America and Arizona again — and tackling the climate crisis at the same time."

Biden added that the United States is rebuilding its infrastructure, supply chains and manufacturing, creating millions of good jobs and strengthening "entire communities like Queen Creek and beyond."

Sen. Mark Kelly, D-Ariz., said the announcement will support thousands of well-paying jobs and boost the state’s position as a leader in manufacturing and renewable energy. “Thanks to unprecedented federal investments in American-made clean energy manufacturing, Arizonans will see stronger supply chains, lower costs and a more competitive economy for the generations to come,” he said.

Sandra Watson, president and CEO of the Arizona Commerce Authority, said the investment involved support from LG Energy Solution and the state along with Pinal County, Queen Creek, Kelly, the Arizona Chamber of Commerce and Industry, the Greater Phoenix Economic Council and utility Salt River Project.

"This has been a tremendous team effort and we look forward to this transformational project breaking ground,” she said in a statement.

Arizona developing battery focus

The expansion is the latest in a string of battery announcements in Arizona.

In February, Ecobat said it would build a lithium-iron battery recycling facility in Casa Grande. In December, American Battery Factory said it would invest $1.2 billion to build a lithium-ion battery manufacturing facility in Tucson, creating 1,000 jobs. Also in Tucson, Sion Power said it would expand its battery-manufacturing operations there, creating over 150 jobs.

Queen Creek Mayor Julia Wheatley said the complex in her town "will create a positive ripple effect for the region and the state, bringing local jobs, infrastructure and capital investment," with LG Energy Solution breaking ground along an advanced manufacturing corridor.

LG's new manufacturing facilities will utilize a state-of-the-art smart factory system in which decisions will be made using machine-produced data. This process is designed to enhance product quality, improve the manufacturing process and boost productivity.

No projections were made about water usage at the plant.

Reach the writer at russ.wiles@arizonarepublic.com.

This article originally appeared on Arizona Republic: LG Energy Solution plan for Arizona battery factory grows to $5.5B