LG Energy Solution will construct a battery manufacturing complex in Queen Creek, Arizona, that will make cylindrical batteries for EVs and lithium-iron phosphate (LFP) pouch batteries for energy storage systems.

The Korean company will invest $5.5 billion into the two manufacturing facilities — $3.2 billion for the EV batteries and $2.3 billion for the LFP batteries. The EV battery factory should have an annually capacity of 27 GWh, while the energy storage battery factory should reach 16 GWh.

“Our decision to invest in Arizona demonstrates our strategic initiative to continue expanding our global production network, which is already the largest in the world, to further advance our innovative and top-quality products in scale and with speed,” said Youngsoo Kwon, CEO of LG Energy Solution. “We believe it’s the right move at the right time in order to empower clean energy transition in the U.S.”

The new cylindrical battery manufacturing facility aims to start mass production of 2170 cells in 2025, mainly for EV makers in North America. The new manufacturing facility for LFP pouch-type batteries aims to start production in 2026.

LG Energy Solution was formerly known as LG Chem and makes the popular RESU line of energy storage systems.