Tesla, Inc. (NASDAQ:TSLA) battery supplier LG Energy Solutions is reportedly having a rethink on its strategy to construct an electric vehicle battery manufacturing plant in the U.S. state of Arizona.
LGES, the world's second-largest EV battery maker, is reviewing plans for the $1.3 billion plant it planned to construct in Arizona due to inflation in material prices that has the potential to push up project costs, Bloomberg reported, citing the company's statement to South Korean daily Chosun IIbo.
The "unprecedented economic conditions and investment circumstances" in the U.S. along with waning battery demand, were cited by the company as reasons for the reported development.
Related Link: Tesla Cushions Downside For Battery Supplier LG Energy Solution In Q1: What You Need to Know
In late March, reports suggested that LGES was planning investments to the tune of $7.2 billion to build two new battery manufacturing plants in the U.S. and another in Canada. As part of the massive investment plan, the company was rumored to begin construction of a plant in Arizona by 2024.
The company reportedly planned to make cylindrical cells in the Arizona plant. These cells are used by companies such as Tesla and Lucid Group, Inc. (NASDAQ:LCID).
