Independently investing more than 5 trillion won by 2025 … aim to secure an additional 70GWh
Active review of the 2nd plant investment in a GM joint venture, expected to be confirmed in the first half of the year
[일렉트릭파워 이재용 기자] LG Energy Solutions is investing in batteries to lead the eco-friendly industry in the US market in line with the acceleration of electric vehicle conversion and changes in the market environment due to the US Green New Deal.
In this regard, LG Energy Solutions announced that it will invest more than 5 trillion won on its own by 2025, and a joint venture with GM will decide to invest in the second plant in the first half following the first plant.
In this regard, LG Energy Solutions set a goal of securing an additional battery production capacity of 70GWh or more independently in the US by 2025.
When investment is made, LG Energy Solution’s own production capacity will increase to a total of 75GWh along with the existing Michigan plant (5GWh).
In particular, with its differentiated product portfolio as its strength, it is advancing not only to pouch batteries for electric vehicles and ESS, but also to cylindrical batteries for electric vehicles, which are rapidly growing recently. LG Energy Solutions is the only battery company that has experience and technology in mass production of these products.
LG Energy Solutions has been promoting the Green Field project since the second half of last year to actively contribute to the Green New Deal and eco-friendly policies in the United States.
This is because global automakers are reviewing local production to respond to the U.S. electric vehicle market, and LG Energy Solutions is discussing business expansion in the U.S. with several automakers, so it is necessary to secure battery production capacity as quickly as possible. In addition, orders from US ESS companies and start-up electric vehicle companies are already increasing significantly.
Accordingly, LG Energy Solutions decided to select at least two candidate sites in the US by the first half of this year. After that, the company plans to make full-fledged investment through promptly reviewing the suitability of the business and deciding on the board of directors.
If additional production capacity of 70GWh is secured, it is expected that more than 10,000 new jobs can be created, including 4,000 direct employees and 6,000 employees during the construction of the factory. In the case of direct employment in the United States, 1,400 in the existing Michigan plant and 1,100 in a joint venture with GM located in Ohio totaled 6,500.
In addition, LG Energy Solutions actively promotes joint advancement and localization with partner companies, and based on the experience of establishing an electric vehicle battery research corporation in the United States since 2000 and continuing investments, from R&D to product development and production as well as raw material procurement, It will focus on establishing a differentiated and stable supply chain within the company.
LG Energy Solutions plans to build a true green factory by operating all new factories in the US with 100% renewable energy. Already, the Michigan battery plant has been operating only on renewable energy since the second half of last year.
On March 5, LG Energy Solutions announced in a conference call on the detailed decision of the final decision on the ITC litigation on March 5, “To respond to the market growth, the existing strategy for post-ownership investment is being converted into a preemptive investment in capacity expansion.” have.
LG Energy Solutions is actively considering additional investment in a joint venture with GM, and Ultium Cells, a joint venture, is currently building a 35GWh plant in Ohio with the goal of operating next year. Together with GM, a specific investment scale and site for the second plant will be confirmed in the first half of the year.
The plant is expected to be of a size similar to that of Plant 1 in Ohio, and will produce batteries with next-generation advanced technology.
This investment aims to supply stable batteries for GM’s future electric vehicle projects.
GM plans to launch more than 30 global electric vehicle models by 2025 and sell 20 of them in North America. It also plans to increase the proportion of electric vehicle sales by up to 40% by 2025.
LG Energy Solutions will secure a total production capacity of more than 140GWh by 2025, with an independent production capacity of 75GWh and a 35GWh plant of 35GWh, a joint venture with GM currently under construction, and the second plant of a similar size. It is expected to be possible.
Jong-Hyun Kim, President of LG Energy Solutions, said, “The US Green New Deal policy will further accelerate the growth of the ESS market as well as the electric vehicle market.” “We will preemptively secure battery production capacity and establish a localized stable supply chain system from R&D to production. We will build and contribute to the success of the US Green New Deal as the best partner in the US electric vehicle and ESS markets.”
LG Energy Solution’s preemptive securing of battery production capacity is due to changes in the US electric vehicle and ESS market environment.
After the election of President Biden, the United States is actively implementing the Green New Deal. In order to promote carbon neutrality in 2050, it will invest $2 trillion over four years in the green energy sector alone.
The government will replace 3 million public vehicles with electric vehicles, and introduce a policy to purchase 500,000 electric school buses by local governments. In addition, policies to drive market demand, such as expanding purchase incentives to encourage the purchase of electric vehicles, and installing 500,000 electric vehicle charging stations, are also in place.
It also operates a reshoring policy called’Buy America’. When selling non-US electric vehicles to the US, a 10% penalty is imposed. A prerequisite for US-made electric vehicles is local production of battery cells.
In recent years, while re-examining the supply chain for semiconductors and high-tech core materials such as batteries and rare earths, it has predicted the substitution of products from allied countries and various institutional changes for this with the goal of diversifying imports of core materials.
Automakers are also rushing to accelerate electric vehicles.
In this year’s CES2021 keynote address, GM Chairman Meri Barra said, “Accelerating GM’s vision starts with technological advances, and GM has an Ultium platform.” Said.
Ford has also made a full-fledged transition to electric vehicles and has expressed its will to internalize batteries.
In addition, the production cycle of electric vehicles is sharply shortening recently, such as automakers remodeling existing internal combustion locomotives’ lines or introducing electric vehicle platforms to quickly convert to electric vehicles.
In addition, the use of ESS in North America is expected to rapidly expand due to the recent cold wave in Texas.
In addition, LG Energy Solutions has already won a significant amount of orders for electric vehicles released in the US by European automakers as well as the US, and discussions are actively taking place to expand large-scale projects in the US.
In addition, the mass production of electric vehicles by US startups using LG Energy Solution batteries is pouring, and orders from US ESS companies are also increasing.
LG Energy Solutions decided to preemptively secure battery production capacity in consideration of these situations, and even after securing more than 140GWh through a joint venture with GM and 75GWh of independent production capacity in 2025, the market growth rate will continue until 2030. Accordingly, the company announced that it will continue to invest, and to this end, it plans to pursue various types of supply chain establishment measures such as joint ventures or joint investments with customers.
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