LG to invest $5.5 Billion for battery factory in Arizona.

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LG Energy Solutions had announced last year that it would invest $1.3 Billion, but due to growing EV demand it announced $5.5 Billion investment on Friday, quadrupling its prior investment for a battery factory in Arizona. The Arizona factory would cater to manufacturing batteries for electric cars and trucks.

The battery complex situated near Phoenix would be manufacturing lithium-iron-phosphate pouch-type batteries for energy storage systems and cylindrical batteries for electric vehicles. For energy storage systems US is a huge market, in fact North America too. LG’s clients include Ford, Honda, Mahindra.

LG Energy Solution CEO Kwon Young-soo said, “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. He further added, “We believe it’s the right move at the right time, enabling us to take advantage of U.S.’s transition to clean energy.”

As far as battery manufacturing in the US in concerned, Ford had earlier announced to build battery factory in Michigan. Experts say that rising investment in battery manufacturing is an effect of Inflation Reduction Act, which passed last year. The act could very well hasten the process of clean energy adoption. However, it remains to be seen whether other battery manufacturers would leverage the IRA and announce their investments.

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