LG Energy Solution in talks to supply batteries to Tesla from Arizona factory

LG Energy Solution in talks to supply batteries to Tesla from Arizona factory [Image source: LG Energy Solution]

LG Energy Solution Ltd. said it is in discussions with Tesla Inc. to supply batteries from its planned Arizona factory in the U.S.

The comments were made during a conference call Friday afternoon, where the Korean EV battery maker said its operating profit surpassed 1 trillion won ($813 million) last year.

The company announced 1.7 trillion won investment in building the new battery factory in the U.S. state in March last year but later said it would review the plan due to huge borrowing costs amid high inflation.

Sources said Tesla needs batteries to be produced in the U.S. in line with the Inflation Reduction Act that favor domestic production and thus requires potential supply from LG Energy Solution, which currently supplies batteries to Tesla in China.

LG Energy Solution posted 1.21 trillion won in operating profit last year with sales of 25.59 trillion won. Sales grew by 43.4 percent from a year ago, with operating profit up 57.9 percent.

The company also said it aims to increase sales by 25 percent to 30 percent and capex for facility expansion by over 50 percent this year.