One year after the first major COVID-19-related declines, gasoline demand improves. But recovery toward pre-pandemi… https://t.co/BQYs9RcKZe
LG pledges US battery push as Biden weighs trade case
As the Biden administration weighs a decision in a blockbuster trade secrets dispute directly affecting LG Energy Solution and future US battery manufacturing capacity, the South Korean company announced plans to invest $4.5 billion through 2025 in new US production facilities, a move it said will create 10,000 clean energy jobs and drive down the cost of electric vehicles (EV) and energy storage facilities.
The investment by the LG Chem unit would increase its US battery manufacturing capacity by nearly 70 gigawatthours (GWh) compared with previously announced plans for its own production facilities and a joint battery venture with General Motors to supply the automaker's drive to greatly expand its EV offerings in the next few years.
LG called the plan to build at least one additional plant and its discussions with GM to launch a second battery manufacturing facility under the JV "a full-fledged effort to ensure its position in the growing US [EV] market." The new investments will add to the JV's first battery production facility -- an Ohio factory that will have production capacity of 35 GWh when it comes online in 2022 -- and bring LG's total US battery-making capacity up to 110 GWh, the company said.
LG announced the plans as the Biden administration approaches an early April deadline to decide whether it will overturn a decision by the US International Trade Commission in a multi-billion dollar trade secrets dispute between LG and rival South Korean battery maker SK Innovation (SKI).
The ITC on 10 February ruled in favor of LG, which charged in 2019 that SKI had stolen trade secrets LG had developed for its battery manufacturing process by hiring away dozens of key engineers and other employees. SKI was also accused of destroying evidence to cover up the theft.
As a remedy, the ITC said SKI could not ship components to the US to manufacture its batteries but instead would have to find domestic suppliers — conditions that battery market analysts say would be difficult if not impossible to meet.
The ITC decision threatens to dismantle SKI's plans for a $2.5 billion battery manufacturing plant currently under construction in Georgia. The plant already has contracts to supply batteries to planned lines of Volkswagen vehicles and the electric version of Ford's best-selling F-150 pickup.
The ITC gave SKI a two- to four-year grace period to allow Ford and Volkswagen to find new battery suppliers, but SKI was clear that the decision threatened its US expansion plans and could derail the Georgia factory that promised 2,600 jobs in a state that just backed Biden for the presidency and in January delivered control of the Senate to the Democrats.
SK Innovation lobbying
SKI has been actively lobbying the Biden administration to overturn the ITC decision and save the Georgia plant, while automakers are urging the two South Korean rivals to reach a settlement for the good of the US EV and battery storage industries.
Several news outlets in South Korea reported 11 March that the two sides have been in settlement negotiations, but SKI said it would not accept terms that would kill its US business or undermine its competitiveness.
For its part, LG's announcement of the investments seemed targeted to win favor with the Biden administration by underscoring the company's role in achieving Biden's ambitious climate and clean jobs targets.
"The goals of the US president and automakers will be a propelling factor in the growth of the country's electric vehicle and energy storage systems markets," said LG Energy Solution CEO Jong Hyun Kim. "LG Energy Solution is dedicated to expanding its battery production capacity and structuring a stable, localized supply chain that provides everything from [research and development] to production."
"As the pressure for domestic production for EV components is heavily increasing in the United States, LG Energy Solution is eager to expand its production capacity so that it can meet the needs of numerous global automakers," the company said. "LG Energy Solution aims to alleviate the industry concerns around battery supply sufficiency and accelerate the process of expanding its position in the US."
The heavyweight fight for dominance in US battery manufacturing comes as the markets for both EVs and energy storage systems are poised for skyrocketing growth, with rapidly falling costs making both products increasingly cost competitive.
EV sales, battery deployments soar
Global EV sales shot up 40% in 2020 despite a steep overall decline in auto sales brought on by the COVID-19 pandemic, and California has set a goal of phasing out gasoline-powered light-duty vehicles entirely by 2035.
Meanwhile, the Energy Storage Association reported last week that battery deployments jumped 179% in 2020 compared with 2019, with similar growth forecasted for the coming years.
Tapping into that growth, LG's expansion of its battery manufacturing capacity would increase the number of its direct jobs from the current 1,400 in Michigan and 1,100 at the Ohio plant to a total of 6,500 direct jobs, with the new investment creating another 6,000 jobs through subcontractors, according to the company.
The company will select two candidates for the location of its new plant by the middle of 2021. The plant will make both "pouch cell" batteries for use in EVs and storage systems and "cylindrical cell" batteries that are finding increased demand from EV makers, the company added.
- Biden tax plan chops fossil fuel subsidies to ramp up renewables
- White House seeks $14 bil to fund climate-related initiatives in budget request
- Puerto Rico weighs options for expanding renewable power, hardening grid
- Swiss asset manager FiveT launches fund to scale up "clean hydrogen” infrastructure
- South Korean conglomerates to invest $38 billion to boost hydrogen economy
- Canadian pension affiliate grabs 3.4 GW share of Spanish PV boom
- Kerry stresses "decade of decision" on global climate engagement
- International Monetary Fund, World Bank emphasize climate commitments