LG Energy Solution, a leading manufacturer of lithium-ion battery cells, stated during a recent conference that it is in discussions with Tesla and several electric vehicle startups to supply batteries from its Arizona factory, as reported by Reuters.
LG Energy Solution has remained tight-lipped about the details of its planned battery factory in Queen Creek, Arizona. The company had previously announced its intention to invest $1.39 billion to build a facility for cylindrical batteries for EVs and electric tools with an annual capacity of 11 GWh. The factory was set to be a wholly-owned subsidiary and construction was slated to begin in Q2 2022, with mass production beginning in 2024.
See also: LG Energy Solution investing US$568 mil to produce 4680-Type battery cells in Korea
However, in July 2022, it was reported that the company was reviewing the project, including its “timing, size, and details.” According to recent reports, negotiations with potential customers have not yet been completed, and agreements must be reached before the project can receive the green light.
It’s likely that the company wants to secure sales before building the factory, which is a common practice given the current economic conditions.
LG Energy Solution is already a supplier of batteries for Tesla. The company supplies 2170-type cylindrical battery cells for Tesla’s Giga Shanghai plant and is said to be supplying cells for the Giga Berlin plant as well.
See also: LG Energy Solution (LGES) announced another battery factory in North America
Given the high demand for 2170-type battery cells in North America, it’s possible that Tesla could be interested in additional supply from LGES’s Arizona factory.
It’s also worth mentioning that LGES plans to produce 4680-type cylindrical battery cells in South Korea, a form factor selected by Tesla. This suggests that the talks between LGES and potential customers could be related to 4680-type cells.
