* LGES raises annual revenue target by 15% to 22 trln won

* Looking into new production site in Europe

* Says it is still reviewing Arizona investment

* Plans to expand LFP battery production in China, U.S. (Adds LGES comment on Asia production sites)

By Heekyong Yang and Jihoon Lee

SEOUL, July 27 (Reuters) - Tesla supplier LG Energy Solution Ltd (LGES) said on Wednesday it was looking at sites in Europe for a new battery plant and would ramp up production in Asia outside of China, where COVID lockdowns and rising costs were weighing on profits.

The South Korean firm, which supplies electric vehicle (EV) batteries to automakers including General Motors Co, Ford Motor Co and Volkswagen AG, said it was responding to increased demand in Europe for cylindrical batteries - the type used by Lucid and Tesla Inc.

The company did not say how much it planned to invest in the new European plant, or give a timeframe for construction.

LGES added that it would use its Asia production sites outside of South Korea and China, such as its battery joint venture with Hyundai Motor Co in Indonesia, to better respond to customer demand.

"With the easing chip shortage and auto customers' plans to launch new models as well as solid EV demand among customers, we expect solid demand for pouch and cylindrical EV batteries in the second half of this year," Chief Financial Officer Lee Chang Sil said in a post-earnings conference call.

Analysts are divided on the near-term outlook for EV demand as inflation and interest rates surge, while snarled supply chains and China's COVID-19 containment measures disrupt production.

Still, some analysts said it would take another year for premium EV sales to slow and have an impact on battery sales because supplies were tight due to pent-up demand.

LGES said it aims to expand joint ventures for pouch and cylindrical batteries for strategic customers and EV startups in North America.

It said it was reviewing a 1.7 trillion won ($1.29 billion) investment in a cylindrical cell plant in Arizona and would issue a statement on the matter in three months. There was no change in customer demand, but extreme inflation plus rising logistics and building costs prompted it in June to delay construction. It had said in March it would begin production in the second quarter.

LGES said it plans to start selling lithium iron phosphate (LFP) batteries manufactured in its China plant in 2023 and add a new LFP battery production line at its factory in Michigan in 2024 to meet demand in North America.

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