The goal is number one in the world! The second largest battery giant in the world spends another 8.6 billion to expand production.

According to foreign media reports, LG Group's battery subsidiary LG Energy Solutions (LG Energy Solution) has confirmed that it will invest 1.36 billion US dollars (about 8.665 billion yuan) to expand its electric vehicle battery capacity in North America in the next three years.

LG Energy's investment is aimed at responding to the growing demand for electric vehicle batteries and energy storage systems in North America, LG Chemical, the parent company of LG Energy, said in a regulatory filing on Nov. 26. By 2024, the money will expand the production capacity of LG Energy's Michigan plant from its current 5GWh to 40GWh.

In fact, this is the latest move by LG Energy to target the layout of the North American market. In March, LG Energy announced plans to invest $4.5 billion to expand its battery production business and build new battery plants in the United States by 2025 to increase its annual production capacity in the United States to 70GWh.

The goal is number one in the world.

According to SNE Research statistics, in the global power battery installed TOP10 ranking from January to September this year, LG Energy still ranks second in total installed capacity, but its market share is 23.8%, 7.4 percentage points lower than in Ningde era.

LG Energy previously revealed that it aims to achieve $270 billion in sales by 2024 and become the number one company in the field of electric vehicle batteries.

To this end, LG Energy is advancing by leaps and bounds. On the one hand, continue to expand the global capacity layout, on the other hand, accelerate the promotion of IPO.

Continue to expand the distribution of global production capacity

In April, LG Energy and General Motors announced that they would spend 2.7 trillion won ($2.424 billion) in 2023 to expand capacity through a joint venture to build a second American electric vehicle battery plant in Tennessee, with an annual capacity of 35 GWh.

In October, LG Energy announced a partnership with Stellantis to build a new battery plant with an annual capacity of 40GWh. The goal is to start construction in the second quarter of next year and start production in the first quarter of 2024.

With the signing of the contract with Stellantis, LG Energy will have a battery capacity of 150GWH in North America by 2025, laying the foundation for it to seize the opportunity in the North American electric vehicle market.

Meanwhile, LG Energy currently has plants in Canada and Mexico. In addition, its joint venture power battery plant with Hyundai Motor's annual capacity of 10GWh NCMA lithium battery in Indonesia has officially started and is expected to be completed in 2023 and put into production in the first half of 2024.

In addition, LG Energy is considering building a new power battery plant in Europe; in the Chinese market, in addition to the two existing factories in Nanjing, a joint venture between LG Chemical and Geely is also under construction.

It is not difficult to see that behind LG Energy's continued expansion of its global layout is its full and firm confidence. LG Energy has previously said that its hand-held orders reached 180 trillion won as of June this year.

Fully guarantee the expansion of production capacity

The huge production capacity planning and the huge orders on hand jointly promote the deep layout of LG energy in the field of upstream raw materials and ensure the stable supply of the production chain.

On the diaphragm side, the parent company LG Chemical and Toray announced on October 27th that they would invest more than 1 trillion won to set up a joint venture in Hungary to jointly enter the European battery diaphragm market. The two sides plan to have an annual production capacity of 800 million square meters of battery diaphragm by 2028.

As early as July this year, LG Chemical announced that it had taken over the LG electronic diaphragm coating project and planned to develop the diaphragm business to a trillion-class scale in recent years. At present, LG Chemical is operating coating production lines in Qingzhou, South Korea, Hangzhou, China, and Wroclaw, Poland, Europe.

In terms of nickel and cobalt resources, LG Energy announced on Sept. 17 that it would spend 35 billion won (about 191 million yuan) to subscribe for a 4.8% stake in Shanghai Gepai Nickel-Cobalt Materials Co., Ltd., to ensure a stable supply of battery core materials. Gepai Nickel and Cobalt will supply 20, 000 tons of nickel to LG Energy over a six-year period from 2023.

In addition to buying stakes in materials companies, LG Energy has already set its sights on Indonesia's nickel mines. Bahlil Lahadalia, chairman of the Indonesian Investment Coordination Committee, said earlier that Indonesia would support mines, smelters, battery cathodes and recycling facilities to build an integrated battery plant for LG Energy from upstream to downstream. The above-mentioned joint venture battery factory with Hyundai Motor in Indonesia is likely to be the actual carrier.

In addition, LG Energy signed a long-term nickel and cobalt procurement contract with Australian Mines, an Australian battery raw material developer, this year. Starting from the second half of 2024, 71000 tons of nickel and 7000 tons of cobalt will be obtained within six years.

In June, LG Energy also acquired a 7 per cent stake in QPM, an Australian nickel-cobalt smelter, and signed a long-term nickel-cobalt procurement contract. Starting from the end of 2023, LG Energy will receive 70000 tons of nickel and 7000 tons of cobalt within 10 years.

In terms of battery copper foil, in December last year, LG Energy invested about 57.5 billion won to increase the capital of Solus Advanced Materials's European subsidiary. LG Energy will use Solus Advanced Materials battery foil (copper foil for secondary batteries) in the next 5 years from 2021.

It is worth mentioning that in the technical route, ternary lithium battery has always been the trump card product of LG energy, but LG energy is not limited to this. Based on the urgent need to improve battery safety and the increasing use of lithium iron phosphate batteries by mainstream automakers around the world, LG Energy is rapidly deploying lithium iron phosphate batteries.

LG Energy began developing lithium iron phosphate battery technology at the Daejeon Laboratory in South Korea at the end of last year and is expected to build a pilot line in 2022 at the earliest, according to South Korean media THE ELEC.

IPO is just around the corner.

LG Energy, a wholly owned subsidiary of LG Chemical, was spun off by its battery business unit last year to become a battery subsidiary of LG Chemical.

LG Energy applied to the Korean Stock Exchange for IPO pre-examination on June 8 this year and is currently awaiting approval for listing.

Although the preliminary application did not disclose the size of the company's fund-raising, it is reported that LG Energy is expected to raise between $10 billion and $12 billion, which will be the largest IPO in South Korea's history. For the purpose of raising funds, LG Energy will be mainly used for battery capacity expansion.

Notably, in September last year, there were media reports that Tesla was seeking to buy up to 10 per cent of LG Energy, while GM and China's Geely were also interested in buying shares in the new LG chemical battery company.

From the perspective of industrial chain, LG Chemistry has set up production bases in Wukang, South Korea, Michigan, China, and Wroclaw, Poland, as well as technology R & D centers in Daejeon, South Korea, Troy, Nanjing, China and Frankfurt, Germany. If LG Energy IPO is successful, the above production bases, R & D centers and original staff will be planned under its name.

From this point of view, the IPO plan of LG Energy will promote the further development of the company's capital and industrial chain.

Summary

LG Energy is indeed changing rapidly. Whether it is a comprehensive layout of the power battery industry chain, adding technology routes, speeding up the research and development of new technologies, or actively promoting the operation of IPO capital, it is all kinds of proof that it is striving towards the goal of being the first in the world.

But since ancient times, the throne has never been easy to ascend. Ningde era has achieved "four consecutive championships" of global battery shipments, and is about to achieve "five consecutive championships", and international cooperation continues to accelerate this year. If LG Energy really wants to surpass the era of Gaoshan Ningde ahead, it will be a long journey!