LS Electric opens EV parts factory in Mexico

South Korean company LS e-Mobility Solutions in Durango, Mexico, EV parts factory was recently officially inaugurated and will be put into production in the near future.

It is said that the plant plans to achieve full-scale production in 2024. By that time, it will be able to produce five million EV relays and four million battery disconnect units per year, which are key components for electric vehicles and for which there is currently a lack of large-scale production in the US, Canada and Mexico.

The plant is the company's third production site, with the first two located in Korea and China. The North American market has a huge demand, and in view of this, the company has plans to further expand its production. By 2030, EV relays' annual production capacity could rise to 9 million units. Meanwhile, the government of the Mexican state of Durango has promised to provide the company with various assistance based on the final investment scale, including but not limited to tax incentives, energy support, land use issues and worker training.

SMM believes that the completion of the plant is timely, considering its future role as part of the North American EV supply chain, helping to localise EVs in North America and benefiting from the US government's Inflation Reduction Act (IRA) subsidies. LS e-Mobility Solutions had already signed supply agreements with Hyundai Motor and Kia Motors, among others, in August last year before the plant was built. So far, it looks like that deal is aimed at the North American market. In the context of the IRA, more EV parts capacity could be built or moved to North America in the future.