Tesla supplier LG has announced plans to allocate $3.1 billion (KRW 4 trillion) for a “smart factory” development dedicated to electric vehicle battery production, as per EVANNEX.
“We plan to set up a diversified product portfolio including pouch-type and cylindrical batteries to respond to customer needs in a timely manner and differentiate production capabilities based on a ‘smart’ factory.”
LG Energy spokesperson
Project Objective
The South-Korean tech firm aims to upgrade the EV battery production plant in Ochang. The significant investment will cover the R&D program development, production hardware, and infrastructure.
Furthermore, it may also start the mass production of the highly anticipated 4680 battery cell.
As for the schedule, the investment will be effective until 2026.
Could LG be producing 4680 battery cells at the smart factory?
There has been a long-standing demand for cylindrical 4680 battery cells, which is still under development until now.
Interestingly, previous reports imply that LG plans to develop the technology at its Ochang plant.
Furthermore, the statement at the top of this article backs February’s speculations that LG plans to expand its cylindrical batteries portfolio.
In addition, LG also invested KRW 580 billion (~$450 million) in June to expand the 4680 assembly line at its second Ochang plant with a 9 GWh production capacity. Apart from that, it also aimed to expand the last-generation 2170 battery cell production by 4 GWh at its 1st Ochang plant.
Another indication is Tesla’s reported plans to erect its next Asian gigafactory in South Korea. In fact, Tesla intends to purchase more than $10 billion of components from the country in 2023, according to President Yoon Suk-Yeol. Yoon also stated it is striving to increase supply chain cooperation with Tesla.
“If Tesla, SpaceX or other companies are considering more investment in (South) Korea, including constructing a Gigafactory, the government will do our best to support the investment. We are preparing a tailored approach to grant some advantages to these specified companies.”
President Yoon
All that said, LG will continue to be a key partner for Tesla in the upcoming years. Notably, mass production of the 4680-battery cell is expected to lower prices and boost efficiency in Tesla’s electric vehicles, as CEO Elon Musk previously claimed.
