LG Energy is Planning on Lithium Iron Phosphate Batteries Mass Production

The power battery market is in full swing, and the competitive landscape has "quietly" changed.

Start Point Research (SPIR) data shows that in the first half of 2022, the global installed capacity of power batteries is 205.1GWh, an increase of 82% year-on-year. A total of more than 55 battery companies have achieved installed capacity. The top ten companies are CATL, LG Energy, BYD, Panasonic, SK On, Samsung SDI, CALB, Gotion High-Tech, Farasis Energy, Sunwoda, the total market share of the above companies reached 90.5%, and 6 Chinese battery companies are on the list.

From the perspective of TOP5 companies, CATL has a market share of 34%, LG New Energy has a market share of 14%, BYD has a 12% share, and Panasonic and SK On have 10% and 7% respectively.

However, behind this change, lithium iron phosphate batteries contribute a lot.

1. Seeking changes, LG Energy accelerates on lithium iron phosphate strategy

For a long time, LG Energy specializes in ternary batteries. Due to the lack of battery life of lithium iron phosphate batteries, it is not optimistic about this technical route. The main reason for switching to lithium iron phosphate batteries is that Tesla and other companies Many electric vehicle companies will focus on lithium iron phosphate batteries.

After Tesla's turn, the first to benefit is the company that has deployed lithium iron phosphate batteries.

For example, CATL, it can be seen from the 2021 financial report that Tesla has become CATL's largest customer. Therefore, the installed capacity of power batteries in the CATL era is more and more dazzling.

Another battery company that has had a "gossip" with Tesla is BYD. There have been repeated reports in the market that BYD's blade battery has been confirmed to supply Tesla. Although such news has been responded by Tesla that it has not received official news, the industry remains optimistic.

Leaving Tesla aside, the "runaway" of South Korean automakers has also made LG Energy "envy". It is understood that in February last year, BYD's blade battery was appointed by Hyundai Motor, and according to the plan, it will start supplying this year. Coincidentally, in December of the same year, Ssangyong Motor and BYD signed a cooperation agreement. The latest news shows that the new model of Ssangyong Motor will be equipped with batteries developed by both parties and will be officially launched next year.

For LG Energy, as CATL and other companies accelerate their penetration in the European and American markets, its position in western markets may be difficult to preserve.

Therefore, under the two-way pressure of active steering and passive selection, LG Energy has accelerated the deployment of lithium iron phosphate batteries.

According to the latest news from the Financial Associated Press, LG Energy plans to produce lithium iron phosphate batteries at the LG China factory in 2023.

In fact, the research and development was carried out 2 years ago. According to some medias' reports, at the end of 2020, LG Energy began to develop lithium iron phosphate battery technology at the Daejeon Laboratory in South Korea, which was packaged in a bag-type soft package.

It should be noted that at the German exhibition not long ago, LG Energy's new energy storage equipped with lithium iron phosphate batteries has been officially unveiled. It can be determined that energy storage is a market that LG Energy urgently needs to consolidate.

From the perspective of production bases, LG Energy has built battery factories in Holland (5GWh), China (27GWh), South Korea (18GWh), Poland (70GWh), Indonesia (10GWh, a joint venture with Hyundai), etc., and plans to build batteries in the United States of a second production base with an annual capacity of 11 GWh, which is scheduled to start production in the second half of 2024. As well as jointly building a power battery factory in Canada with automaker Stellantis, it is planned to be put into operation in the first quarter of 2024, with an annual production capacity of more than 45GWh.

According to the plan, by 2025, LG Energy's global production capacity will reach 520GWh, of which North American production capacity will reach 200 GWh, and China's factory production capacity will be increased to more than 100GWh.

In China, in addition to the Nanjing plant, LG Energy has also established a joint venture with Geely Auto to build a power battery base.

Judging from the current situation, LG Energy's lithium iron phosphate batteries will be produced in the existing factory in Nanjing, and the expansion of the factory will also be accelerated.

2. Local Chinese suppliers will benefit from LG's strategy of localization in the Chinese market.

LG Energy, formerly the battery business unit of LG Chem, was officially spun off on December 1, 2020. After independence, LG Energy quickly entered the capital market and was listed on the Korea Stock Exchange on January 27 this year.

At present, LG Chem is still its main holding company and provides all-round resources and assistance to its battery business.

According to previous media reports, LG Chem may establish a joint venture with its Chinese partners to supply LG Energy with the raw materials needed to produce lithium iron phosphate batteries.

According to Start Point Lithium Battery Big Data, before LG Energy became independent, LG Chem had cooperated with many Chinese companies in the battery field. Among them, there are Bamo Tech, EASPRING, etc. in the field of cathode materials.

In the field of anode materials, there are ShanShan, BTR, Putailai, Xiangfenghua, etc.; in the field of diaphragms, there are Semcorp, Senior Materials, Sinoma Tech, etc.; the electrolyte side includes GTHS, CAP Chem, Tinci Materials, etc.; and the battery structural part has cooperation with KDL.

Therefore, once LG Energy starts the production of lithium iron phosphate batteries next year, the above-mentioned companies that have already cooperated will be the first to share the cake. For example, EASPRING, which has long cooperated with LG Energy, is actively deploying lithium iron phosphate and has developed high-performance lithium iron phosphate and lithium manganese iron phosphate materials.

In addition, from the upstream of the material, China's leading lithium iron phosphate suppliers will have the opportunity to enter its supply chain.

Resources: Start Point Lithium Battery Big Data,

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