LG Energy Solution is looking to accelerate its investments in cylindrical batteries after it has already done so with its pouch-type batteries that are the company’s main type of battery. It has been confirmed that the company plans to increase the cylindrical battery production capacity of its Ochang plant by 25% by the end of the third quarter this year when the company originally was looking to increase the production capacity by the end of this year. The company’s goal is to increase its supply of batteries to American electric vehicle (EV) makers that are looking to become the next Tesla and gain competitive edge over its competitors.
According to the industry on Thursday, LG Energy Solution plans to build two additional cylindrical battery production lines at its Ochang plant by the end of the third quarter.
The company will invest tens of millions of dollars in the extension. Once the construction is completed, the total production capacity of the company’s Ochang and Nanjing plants will increase from 20 GWh to 35 GWh. Also, the number of cylindrical battery production lines at the Ochang plant will increase from eight to ten.
Such investment will push forward the company’s original plan. Initially, the company planned to finish the construction by the end of this year. It is also looking to increase the total production capacity of the two plants to 60 GWh by 2023. Such production capacity will allow the company to supply enough batteries for one million EVs every year.
This investment is part of a plan of President Kim Jong-hyeon of LG Energy Solution who is looking to increase the company’s cylindrical battery production. This will be the first time that additional cylindrical battery production lines will be constructed at the Ochang plant since the appointment of President Kim.
It is reported that the two additional production lines will be used to make batteries for Lucid Motors, Lordstown Motors, and Rivian. These companies are American EV makers that are looking to become the next Tesla and they will use LG Energy Solution’s battery cells for the first time for their new EVs.
LG Energy Solution’s cylindrical battery is 21 millimeters long and 70 millimeters high. As energy capacity of the company’s batter cell has increased, performance of battery materials has also been upgraded. The company uses NCM811 cathode materials developed by LG Chem last year.
LG Energy Solution’s recent investment is made to target the EV market in the United States. Lordstown Motors was recently selected as a government vehicle supplier for President Biden. LG Energy Solution will be the battery supplier for Lordstown Motors’ electric trucks.
Demands for cylindrical batteries have been rising since Tesla first started to use LG Energy Solution’s cylindrical batteries. By supplying 21700 cylindrical batteries to Tesla for the Model 3, LG Energy Solution was once ranked the top battery supplier in the world.
However, competition with other battery makers has been intensifying as Panasonic and CATL have begun to supply their cylindrical batteries and prismatic batteries respectively to Tesla for the Model 3. By increasing the number of customers along with increased production capacity of the Ochang plant, the company will look to gain competitive edge over its competitors.
Regarding the recent investment and the current situation with customers, a representative for LG Energy Solution said that the company cannot disclose any detailed information related to the company’s recent investment and customers.
The company also plans to increase pouch-type battery production capacities of its plants in the United States and Poland. Its pouch-type battery production capacity is expected to increase from 100 GWh to 200 GWh by 2023. Such battery is the company’s main type of battery and is used the most by Volkswagen and General Motors for their EVs.
Staff Reporter Kim, Jiwoong | jw0316@etnews.com