LGES to make decision 'soon' on envisioned Arizona plant: CEO
By Kim Seung-yeon
SEOUL, March 24 (Yonhap) -- LG Energy Solution Ltd. (LGES) will make a decision soon on an envisioned Arizona plant in the United States, including the possibility of supplying Tesla Inc. from the proposed manufacturing facility, its CEO said Friday.
"We're thinking deeply about it and will make a decision soon, possibly before the first half," LGES CEO Kwon Young-soo told reporters after a shareholders meeting.
LGES said in March last year it will build its second standalone factory in Arizona, but it withdrew the plan a few months later, citing a spike in costs amid runaway global inflation.
In an earnings call in January this year, the company said the plan will proceed as originally planned. Speculation has arisen that the Arizona factory will be built to supply Tesla for its vehicles in the U.S. market.
LGES supplies its batteries to Tesla in China.
Kwon said negotiations have been going smoothly with Toyota Motor Corp. over a potential partnership, including the possibility of a joint venture, Kwon added, without elaborating.
Asked about the lithium iron phosphate (LFP) batteries, Kwon said LGES expects to produce them at scale for electric vehicles starting 2025.
South Korean battery makers, mainly focused on the higher end of the EV battery market, are in a race to develop the cheaper LFP cells to meet the growing demand from global automakers seeking to diversify cell types.
LFP batteries have increasingly gained traction due to cheaper costs than high-nickel based cells, but their lower energy density remains a challenge.
LGES, the world's second-largest battery manufacturer after China's CATL, presented its LFP battery solution for energy storage systems (ESS) at a Seoul battery show last week.
"We'll have a part of (the LFP cells) for the ESS come out this year, and those for the (electric) vehicles will come around in 2025," Kwon said.
Friday's shareholders meeting was LGES' first such session following the blockbuster initial public offering in January last year that helped the company raise 10.2 trillion won (US$7.9 billion). LGES was carved out from LG Chem Ltd. in late 2020.
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