Employees at LG Energy Solution’s battery factory in Michigan, USA, are checking products. LG energy solution provided
LG Energy Solutions is making large-scale investments in the US. Batteries are usually jointly invested with automakers, but LG Energy Solutions plans to invest at least 5 trillion won on its own. It is aimed at electric vehicle start-ups and energy storage (ESS) companies in the United States, where it is difficult to establish a joint venture. In addition, it is interpreted that a paving stone was laid to eliminate concerns about battery shortages in the US without SK Innovation by increasing production capacity.
“Catch the fast-growing US battery market”
LG Energy Solutions announced on the 12th that “to lead the eco-friendly industry in the United States, we will invest more than 5 trillion won by 2025 and raise our own production capacity in the United States to a total of 75GWh, including the existing Michigan plant (5GWh).”
This is a move aimed at the US electric vehicle market, which is expected to grow rapidly. Goldman Sachs raised its outlook for the US electric vehicle market in December of last year. Prior to the election of President Biden, the forecast was 1.5 million in 2025, 4 million in 2030, and 6.6 million in 2035, and recently, the forecast has increased to 2.4 million, 4.8 million, and 8 million, respectively.
Wood McKinsey, a global energy consulting company, predicts that US ESS demand will surge from 1.5GWh last year to 7GWh in 2025. Some forecasts that actual demand will increase sharply due to the recent cold wave in Texas in the US.
Cylindrical battery of LG Energy Solution. LG energy solution provided
Accordingly, it can be interpreted that LG Energy Solutions chose to invest independently, not a joint venture with an automaker. Since the second half of last year, LG Energy Solutions has been promoting the’Green Field Project (a method of securing a site by itself and constructing a factory)’, and has decided to select at least two candidate sites in the US by the first half of this year.
In addition, it is known that the amount of battery orders being supplied to US electric vehicle start-ups such as Rosetown Motors and Pro Terra has already increased significantly. Thanks to the use of these startups, the new plant plans to produce new cylindrical batteries for electric vehicles that have not been produced in the US until now.
An official at LG Energy Solutions said, “By dissolving concerns about the shortage of battery supplies in the US market, we expect to gain momentum in winning large-scale US-related projects with global automakers and ESS companies.”
A view of Ultium Cells, a joint venture between LG Energy Solutions and GM, at the Ohio plant in the US. LG energy solution provided
GM joint venture builds second plant and produces next-generation batteries
LG Energy Solutions also announced that it is actively considering additional investments in Ultium Cells, a joint venture with GM. Currently, a 35GWh plant is being built in Ohio, USA, and plans to determine the size and site of the second plant investment in the first half of the year with GM. The plant will produce batteries with next-generation advanced technology on a similar scale to Ohio Plant 1.
This investment aims to supply stable batteries to GM’s future electric vehicles. GM plans to launch more than 30 global electric vehicle models by 2025 and sell more than 20 of them in North America. In addition, the proportion of electric vehicle sales during the same period is also planned to increase to 40%.
The large-scale US investment plan of LG Energy Solutions is believed to include the intention to contain SK Innovation, which is struggling with the infringement of trade secrets in the industry.
An industry insider said, “LG Energy Solution’s decision to increase its own production capacity may be a measure aimed at some claims that SK Innovation’s US business is inevitable based on battery shortage.” It emphasized economic effects such as, but this too will have the intention to reassure the US government against SK’s logic,” he said.
Kim Kyung-jun reporter [email protected]
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