62.2 billion! Three major battery factories of global battery giants are coming

Original CiCi Week Veken lithium battery 2024-05-02 17:49 Guangdong

LG Energy Solution, South Korea's leading battery company, is accelerating its pace of building and expanding power battery production in the United States and China.

Two factories in the United States were delivered and put into operation

At the beginning of April, LG Energy Solution's two power battery factories in the United States entered the new stage of delivery and construction.
One of the joint venture factories with General Motors began delivery. On April 1, local time, LG Energy Solution announced that its Ultium Cells second factory in Spring Hill, Tennessee, produced and delivered the first batch of batteries to customers two and a half years after the start of construction. Ultium Cells is a battery joint venture company jointly established by General Motors and LG Energy Solution. General Motors and LG Energy Solution plan to invest US$7.475 billion to build three battery factories in Ohio, Tennessee and Michigan, with a total battery production capacity of more than 130GWh. The batteries produced by the second factory in Tennessee, which began delivery this time, are expected to be installed on GM's third-generation electric vehicle models such as the "Cadillac Lyriq". The total planned investment of the factory is US$2.575 billion (approximately RMB 18.642 billion), and it plans to expand its annual production capacity to 50GWh . In addition, the first factory in Ohio is currently in a state of continuous and stable production, and the third factory in Michigan is expected to be put into production next year. The second is the construction of a wholly-owned factory in Arizona, USA. On April 3 (local time), LG Energy Solution announced that its battery plant in Arizona, USA has begun construction and is expected to be put into production in 2026. The total investment of the plant is 7.2 trillion won (about 37.8 billion yuan) . It is LG Energy Solution's second independent factory in the United States and the first dedicated cylindrical and ESS (energy storage system) battery factory. The total planned production capacity is 53GWh, including 46 series cylindrical batteries (36GWh) for electric vehicles and lithium iron phosphate soft-pack batteries (17GWh) for energy storage systems. Including the above four factories, LG Energy Solution currently has 8 battery factories in North America with a total planned production capacity of 352GWh . The remaining four are three joint ventures with Hyundai Motor, Honda Motor, and Stellantis, as well as the first independent factory in Michigan. The plans for LG Energy Solution's eight North American production plants are as follows (green is wholly-owned and red is a joint venture) :

Photo/LG New Energy

Expanding production base in China

According to Jiangning District Media, in late March this year, Jiangning Binjiang Development Zone and LG Energy Solution signed a contract on power and energy storage battery production projects, with a total investment of approximately US$800 million (approximately RMB 5.792 billion) .
This means that LG Energy Solution intends to expand the production of power and energy storage batteries in China. According to data, in August 2018, LG Energy Solution settled in Jiangning Binjiang Development Zone and invested US$3.3 billion in a battery project, focusing on providing batteries for Volkswagen and other companies. In 2023, Jiangning Binjiang Development Zone signed the "LG Energy Solution General Motors Project" with LG Energy Solution, mainly to produce exclusive power batteries for General Motors.

Currently, LG Energy Solution has three battery factories in Nanjing with a total production capacity of 62GWh. LG Energy Solution has said that it plans to expand the production capacity of the Nanjing factory from 62GWh to 145GWh by 2025.

Ensure the production of lithium iron phosphate batteries

Lithium iron phosphate batteries are a technical route that LG Energy Solutions has invested heavily in. Since the end of last year, LG Energy Solutions has begun to fully produce lithium iron phosphate batteries for energy storage systems at its Nanjing plant in China, and electric vehicles are preparing to start mass production in the second half of 2025.
At the same time, LG Energy Solutions has begun to establish a complete supply chain to ensure and expand the production of lithium iron phosphate batteries. On February 22, LG Energy Solutions issued a statement saying that it had signed a long-term supply contract with Changzhou Lithium Source for lithium iron phosphate battery positive electrode materials for electric vehicles and energy storage systems . According to the contract, Changzhou Lithium Source will supply LG Energy Solutions with a total of 160,000 tons of lithium iron phosphate positive electrode materials from 2024 to 2028. This is equivalent to the production of 1 million electric vehicle batteries with a range of more than 400 kilometers. In addition, the two parties also agreed to make every effort to negotiate and determine the additional supply and sale of 360,000 tons of lithium iron phosphate positive electrode material products during the period from 2025 to 2028. This number is non-binding, and the two parties will confirm the final number before June 30, 2024. Changzhou Lithium Source's core product is lithium iron phosphate. It was established by Longpan Technology in 2021, and the company holds about 69.17% of the shares. In addition, other shareholders of Changzhou Lithium Source are also very influential, including companies under CATL and BYD. Among them, Fujian Times Mindong New Energy Industry Equity Investment Partnership, a joint venture of CATL, holds 6.97% of the shares; Ningbo Meishan Bonded Port Area Wending Investment Co., Ltd., a wholly-owned subsidiary of CATL, holds 6.39% of the shares; and BYD holds 4.37% of the shares. As of now, Changzhou Lithium Source has five major domestic production bases in Changzhou, Jiangsu, Tianjin, Suining, Sichuan and other places, with an annual production capacity of 310,000 tons of lithium iron phosphate. At the same time, it has also established a project company, Indonesian Lithium Source, in Indonesia, and invested in a 120,000-ton lithium iron phosphate project. The first phase of 30,000 tons is planned to be put into production around 2024.

In fact, this is not the first cooperation between Changzhou Lithium and LG Energy Solution. In September 2023, the two parties had "joined hands" and signed a "Memorandum of Understanding", agreeing to jointly establish a new joint venture or use Indonesian Lithium as a joint venture to operate a cathode material factory in Indonesia.

Summarize

The latest data released by market research firm SNE Research shows that among the top 10 global electric vehicle power battery installations in January-February 2024, LG New Energy ranked second with an installation of 10.1GWh, a year-on-year increase of 24.8%, and a market share of 13.7%.
In order to narrow the gap with CATL and catch up with the world's number one, LG New Energy plans to further enhance its market competitiveness through multiple technology routes and multi-faceted cooperation. The 46 series cylindrical batteries and lithium iron phosphate batteries are its latest product portfolio. Weike.com Lithium Battery learned that LG New Energy's lithium iron phosphate batteries for energy storage systems have begun full mass production at the end of last year, and electric vehicles are expected to be mass-produced in 2025; it is planned to start mass production of 4680 cylindrical batteries at the Wuchang plant in the second half of this year. With the construction of production capacity and the production of new products "accelerating", it is exciting to see what new atmosphere LG New Energy will bring to the power battery market in the future.