In temporary: LG Energy Solution (LGES), the world’s second-largest maker of electrical automobile batteries and a significant Tesla provider, is reviewing its plans to construct a $1.3 billion plant in Queen Creek, Arizona, as US inflation continues to soar, leading to what it calls “unprecedented financial circumstances.”
LGES plans to construct an Arizona plant with 11 GWh/yr capability to provide cylinder-type batteries for EVs and electrical instruments. The firm earlier this yr introduced that building on the ability was set to start within the second quarter, with mass manufacturing scheduled for the second half of 2024
But the plant could not go forward. LGES stated it’s presently reviewing numerous funding choices in mild of the “unprecedented financial circumstances and funding circumstances within the United States.” An LGES spokesperson specified to Reuters that the corporate would reevaluate its funding within the Arizona manufacturing facility.
Increased building prices, weakening battery demand, rising inflation, and the financial downturn are all components in LGES’ hesitation. It will take at the least one to 2 months for the corporate to determine whether or not to desert plans for the Arizona manufacturing facility. However, it’s nonetheless constructing three vegetation with General Motors in Ohio, Tennessee, and Michigan and intends to increase its present manufacturing facility in Michigan.
The faltering financial system and fears of a recession are impacting a number of tech companies. Tesla has laid off a proportion of its workforce, which has led to a lawsuit claiming it violated federal legal guidelines. CEO boss Elon Musk additionally demanded that employees return to the workplace for at the least 40 hours per week. Unfortunately, it appears there aren’t sufficient parking areas or desks at Tesla’s workplaces to accommodate them.