Image: Munro & Associates
LG Energy Solution is in “active discussion” with Tesla for battery supply from its new factory in Arizona, the company said. The start of production at the factory was scheduled for 2024, but the final decision will be made after negotiations with the companies to which it will supply.
LG Energy Solutions (LGES) hopes to benefit from the US Inflation Reduction Act (IRA), so it is actively investing in North America. Announcing a 43 percent increase in annual sales to a record 25.6 trillion won ($21 billion) and a 58 percent increase in operating profit to 1.2 trillion won in 2022, LGES said on Friday it intends to expand sales this year by 25 to 30 percent, while continuously improving its operating profit margin.
The LG Group subsidiary cited sales growth in North America as one of the most important preconditions for achieving its goal. The company expects the North American battery market to grow by more than 60% this year, leading to overall growth in the global EV battery market.
“Growing demand in the U.S. market will be able to offset sluggish demand in the European market this year,” an LGES spokesman said on a Friday conference call, according to The Korea Times.
LGES was confident it would meet the IRA's requirements, although it added that the top priority was to improve cost competitiveness to prepare for possible adjustments to US law. The battery maker said the IRA would allow it to maintain profitability amid cost risks from investments in North America.
LGES has confirmed that it is in “active discussions” with Tesla for battery supply from its new proposed factory in Arizona, US. The company said it is still debating whether to continue building. Initially, the alleged factory became known in March 2022. LGES was going to invest 1.7 trillion won (about $1.4 billion at the time) to build a battery plant. The start of production was scheduled for 2024.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.