LG Energy Solution expands investment to overcome EV market 'chasm'

BY JEONG SEONWU, Korea JoongAng Daily - LG Energy Solution views the current situation in the EV market as a stagnation phase, known as the “chasm,” which occurs just before the widespread adoption of the vehicles.

The company believes that by maintaining active investment during this period, it will be able to gain a first-mover advantage in North America as well as the rest of the world as the market enters a phase of full-scale growth.

In April, LG Energy Solution announced that the first battery cell produced at Ultium Cells, its joint venture with GM, had been delivered to a customer. The batteries produced at this plant are set to be installed in GM's new third-generation EV models, including the Cadillac Lyriq.

Ultium Cells' second plant plans to gradually increase its production lines to expand its total production capacity to 50 kilowatt hours (kWh). This capacity is sufficient to produce approximately 600,000 high-performance pure EVs capable of traveling over 500 kilometers (310 miles) on a single charge.

Ultium Cells is operating and constructing a total of three production plants to target the North American EV market.

The first plant, located in Lordstown, Ohio, began operating in November 2022 and has maintained a high yield rate from the start, ensuring stable production. The third plant, being built in Lansing, Michigan, is on track to commence full-scale operations next year. The total investment for Ultium Cells' first, second and third plants amounts to 9 trillion won ($6.6 billion).

Once all three plants are fully operational, their combined production capacity is expected to reach 145 gigawatt hours (GWh).

In addition to its joint venture plants, LG Energy Solution is also continuing to invest in standalone factories. Recently, the construction of the company’s battery production plant located in Arizona in the United States began.

The plant’s significance lies in that it is the company’s first production facility dedicated to cylindrical batteries and energy storage systems (ESS). The plant is expected to have a production capacity of 36 GWh for cylindrical batteries and 17 GWh for ESS LFP batteries, bringing the total production capacity to 53 GWh. At the Arizona cylindrical battery plant, production of the 46-Series batteries for EVs is scheduled. The 46-Series, often referred to as the next-generation battery, has attracted significant attention from major global customers even before production began.

LG Energy Solution previously announced plans to commence mass production of cylindrical 4680 batteries at its Ochang Energy Plant in the second half of this year, making it the most advanced production among major global battery manufacturers.

At the ESS battery plant, LG Energy Solution plans to produce pouch-type lithium iron phosphate (LFP) batteries developed independently by the company. By localizing production in the United States, the company aims to secure price competitiveness through reduced logistics and tariff costs.

The company also plans to provide differentiated customer value through immediate on-site support and management services to meet customer demands. LG Energy Solution will now have the most diverse and competitive product portfolio among battery companies in the North American region, encompassing not only pouch-type and cylindrical batteries for EVs but also LFP batteries for ESS.

A representative from LG Energy Solution said, “We will overcome the chasm phenomenon through portfolio expansion based on technological leadership.”

Source:https://koreajoongangdaily.joins.com/news/2024-05-28/business/guestReports/LG-Energy-Solution-expands-investment-to-overcome-EV-market-chasm/2056387 

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