LG’s de facto monopoly in the US battery market… Inside the joint plant with GM, Mansu Choi’s electric vehicle battery

LG Energy Solutions and General Motors (GM) will establish an additional electric vehicle battery joint venture in the United States. Excluding Panasonic, Japan, which only supplies batteries to Tesla, LG is expected to become a virtual monopoly in the large electric vehicle battery market in the United States.

According to the Wall Street Journal on the 4th (local time), LG Energy Solutions and GM are discussing a plan to build an electric vehicle battery cell plant in Tennessee, USA. The two companies will jointly announce their specific location and investment scale within the first half of the year.

The two companies are currently investing $2.3 billion (about 2.7 trillion won) in Rosetown, Ohio, to build a total electric vehicle battery plant of 30 GWh (gigawatt hours). The Ohio joint venture will be put into operation in 2022. It is reported that the Tennessee plant will be similar in size to the Ohio plant.

LG Energy Solutions has been operating its own battery plant in Michigan since 2012. The scale is 5GWh. It supplies batteries to GM Ford Chrysler.

With the establishment of the Tennessee plant, LG is expected to take a clear lead in the rapidly growing US electric vehicle market. When the factory is built as scheduled, the production scale in the US will reach 65GWh.

Vice-Chairman Shin Hak-cheol of LG Chem (right) and GM Chairman Mary Barra (left) are signing a battery cell joint venture agreement at GM Global Tech Center in Michigan, USA in December 2019. Provided by LG Chem.

Although rival SK Innovation is constructing a 21.5 GWh battery plant 1 and 2 in Georgia, normal operation is uncertain because LG and LG have lost a lawsuit for infringing battery trade secrets. United States International Trade Commission (ITC) Last month SKUS production and import of innovation’s battery 10They ruled that it was banned for years.

China’s CALT, the biggest competitor of LG Energy Solutions in the global battery market, has not even established an investment plan after opening an office in the US. This is because the way to advance was blocked due to the trade dispute between the US and China. AESC, which was a Japanese company and then sold to China, has a local plant, but it is at the level of supplying small quantities to Nissan.

In addition, since Panasonic only supplies batteries to Tesla, US automakers have no choice but to look at LG Energy Solutions.

Locally, it is expected that US automakers’ investment requests for LG energy solutions will decrease. According to market researcher IHS Markit, the U.S. electric vehicle market is expected to double from 1.15 million this year to 2.2 million by 2025.

The partnership between LG and GM is also expected to strengthen. LG Chem has been selected as the sole supplier of batteries for the world’s first mass-produced electric vehicle, the Chevrolet Volt, launched by GM in 2009. Is supplying.

An official from the battery industry said, “LG can take a step forward in a situation where competitors such as CATL SK Innovation cannot properly come up with investment plans in the United States.”

Reporter Mansoo Choi [email protected]