The company said on Wednesday that it has closed an initial $75 million tranche in financing that’s anticipated to eventually total $150 million.
Siemens Financial Services was the lead investor, while Quanta Services, Nidec Motor Corp., Honeywell Ventures, Trog Hawley Capital and a utility scale energy storage provider also partnered in the private placement. Goldman Sachs & Co. LLC was KORE’s agent.
“Siemens Financial Services is proud to be the lead investor committed to backing KORE with both our capital and know-how. We support the industries and create the infrastructure forming the backbone of the American economy and apply that same commitment to the development of the battery industry in the U.S.,” said Steffen Grosse, CEO of Equity Finance, Siemens Financial Services, in a statement. “KORE’s focus on manufacturing and vital industries such as energy storage, transportation electrification and grid modernization align with the strategic direction of SFS’ investments in the U.S. to date.”
A KORE Power spokesperson said it expects the second half of the original $150 million in financing within “the coming weeks.”
Initial output expected by late 2024
Called KOREPlex, the now $1.25 billion factory was originally scheduled to break ground by the end of 2021 with the goal of beginning production by the second quarter of 2023 and total 1 million square feet.
But plans have continued to be pushed back as the company purchased the 214-acre property in Buckeye and submitted plans to the city almost a year after its formal announcement. A spokesperson for KORE Power said that while its original timeline “was optimistic, we were still well within our expected start date,” adding that this round of financing allows them to start the first phase of construction.
The city of Buckeye said the development services department is in the middle of the review process for KORE’s factory plans and that “everything is on schedule.” KORE’s site plan will need to receive final approval by the city’s planning commission in a vote, but a spokesperson for the city of Buckeye said it’s too soon to know when that will be scheduled.
KORE Power said it plans to use the proceeds of the financing to start construction of the KOREPlex gigafactory in Buckeye and purchase long lead-time materials needed to build the facility. The company said it will break ground by the end of 2022 and that initial output will start in late 2024. Yates Construction is the general contractor for the facility.
KOREPlex is expected to have an initial annual production of six gigawatt-hours of high-density lithium-ion cells and eventually expand to 12 gigawatt-hours. Earlier this year, KORE Power said it still plans to hire 3,000 workers over time.
The company says it will be one of the first battery cell gigafactories built independently of an automotive original equipment manufacturer, which it said will allow the Buckeye plant to supply batteries to a range of e-mobility and energy storage customers.
“As a U.S.-based manufacturer with the ability to supply top-tier lithium-ion cells, the KOREPlex will take us to the next level. We will have American workers and an American supply chain driving the growth of clean energy and vehicle electrification,” said Lindsay Gorrill, CEO and co-founder of KORE Power, in a statement, adding that he expects to announce additional agreements in the coming months for the plant.
Battery and electric vehicle industries ramping up in Arizona
KORE Power first started in 2018 and currently has a plant operating in China that can produce two gigawatt hours annually but could scale up to six. This summer, KORE Power announced it had acquired a 4.22% stake in Gilbert-based ZEVx, formerly Zero Electric Vehicles, which KORE also signed a battery development agreement with.
Most of the world’s battery cells, which end up in electric vehicles, e-bikes, e-scooters or drones, are produced in Asia, but KORE Power aims to be the first major U.S.-owned manufacturer of high density lithium-ion pouch cells in the country.
Battery giant LG Energy Solution has also made plans to build a new battery factory in Arizona in Queen Creek, but those plans have been delayed and it’s unclear when or if construction will start on the project.
More developers have also started making plans to build large industrial warehouses or facilities around the planned KORE Power and LGES plants in Buckeye and Queen Creek in recent months. The state is also working to attract more electric vehicle and battery-related companies to Arizona to support a growing ecosystem in areas like Pinal County.
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