Plants under Construction
Korean battery makers are changing their production targets even as they are building plants. This is in response to the rapidly growing demand for batteries. Spurred on by support from North American countries, battery makers are increasingly changing production plans for plants that are barely completed in order to dial up production volume.
Lee Hoon-sung, CEO of Nextstar Energy, a Canada-based joint venture between LG Energy Solution and global automaker Stellantis, recently told local media outlets in Canada that the company plans to increase the production capacity of the joint venture by about 10 percent from 45 gigawatt hours (GWh) per year to 49 GWh, according to industry reports on July 2.
The battery cell plant in Ontario, Canada, in which LG Energy Solution and Stellantis have invested about US$4 billion, is currently under construction with the aim of going live in 2024. It was originally planned to produce batteries for PHEVs as well as BEVs.
However, in order to focus more on BEVs, the company scrapped the original parallel production plan and changed course to expand the volume of its high-performance batteries. The plant will roll out batteries for 500,000 electric vehicles per year.
Samsung SDI is also expanding its production facilities, announcing on July 24 that it will build a second joint venture plant with Stellantis. At the same time, the first plant, currently under construction in Indiana, will ramp up its annual output from 23 to 33 GWh, with the goal of starting in 2025.
Korean battery makers are attracted to the benefits that North American countries offer. These include a new advanced manufacturing production credit (AMPC) from the U.S. Inflation Reduction Act, which provides a subsidy of US$35 per kilowatt-hour (kWh) of batteries. In the first half of this year alone, LG Energy Solution and SK on benefited from AMPCs worth 211.2 billion won and KRW 167 billion won, respectively.