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LG to Expand Capacity for EV Batteries in Michigan

LG Energy Solution will invest $1.7 billion to increase the capacity at its Holland, MI electric vehicle (EV) battery factory five-fold.

The factory will produce long cell design batteries to give EVs a longer driving range.  The expansion includes a two-story building housing a warehouse, control room, cell test building, administrative offices, utility, and safety facilities.

The LG batteries will be installed in EVs manufactured by Tesla, VW, and GM.


Video Spotlight:  


This post is based on the Electrek article, LG announces a $1.7B ramp-up, 1,200 new jobs, at its Michigan EV battery factory, by Michelle Lewis, March 23, 2022; The Detroit News article, Michigan lawmakers ask EPA to speed permits for GM battery plant in Delta Township, by Riley Beggin, April 13, 2022; and the YouTube video in the Spotlight. Image source: Gene Chutka/E+/Getty Images.

Discussion Questions:

1.  How did LG’s capacity expansion decision relate to the manufacturability of EV batteries?

Guidance: There is demand for long cell design batteries that give EVs a longer driving range.  LG has the necessary knowledge but insufficient capacity to produce these batteries.  In order to satisfy the manufacturability of EV batteries, LG has to increase capacity five-fold to provide space for a warehouse, control room, cell testing, administration, utility, and safety.

2. What factors did LG consider in making its capacity expansion decision?

Guidance: The factors include available capacity, expertise, and demand.  Although LG has the expertise and demand for the long cell EV batteries, it lacks adequate capacity to produce the batteries.  As a result, LG decided to invest $1.7 billion to increase its existing capacity five-fold and to add 1200 new hires.

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