South Korea’s LGES reviews US$1.3bil Arizona battery investment

SEOUL: South Korean battery maker LG Energy Solution Ltd (LGES), a major supplier to United States carmakers including Tesla, is reassessing a US$1.3bil (RM.7bil) investment plan for a Arizona factory citing “unprecedented” economic conditions.

News that South Korea’s biggest battery maker is reviewing the plan, unveiled only three months ago, knocked LGES shares down 4% yesterday.

It comes as more firms review business plans, fearing a drop in consumer demand amid roaring US inflation mainly caused by global supply chain disruption.

Tesla is cutting 10% of salaried staff and pausing hiring worldwide, and its chief executive Elon Musk predicted last week a US recession was more likely than not.

LEGS said in a statement it was currently reviewing various investment options due to the “unprecedented economic conditions and investment circumstances in the United States.”

It did not mention the Arizona plant, but an LGES spokesperson said the company would reevaluate its investment in the standalone factory.

Elsewhere in the United States, LGES is building three plants with General Motors Co in Ohio, Tennessee and Michigan and plans to expand its existing factory in Michigan. — Reuters

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