Korea’s EV battery leader bets on rapid US growth

South Korea’s biggest electric vehicle battery maker is betting on rapid growth in the US after a climate-friendly tax cut to squeeze its biggest rival China as competition in the sector grows fiercer. harsh.

North American electric vehicle market the battery Robert Lee, regional head of LG Energy Solution, said it will grow the fastest in the world this year.

South Korean battery makers were boosted by the passage of the U.S. Inflation Reduction Act, which provides billions of dollars in subsidies to electric vehicle companies in the United States that do not depend on the Chinese components. The act is part of Washington’s effort to reduce America’s economic dependence on China.

LGES is building a factory in Ohio to produce batteries in a joint venture with Japan’s Honda. It has additional joint ventures with General Motors and Stellantis to produce batteries in the US and Canada, and said it is in “active discussions” to supply cylindrical batteries to Tesla from a proposed plant in Arizona.

The IRA “was a great piece of legislation for us” but “not necessarily the reason why we invest in North America,” Lee, LGES’ head of North American operations, told the Financial Times.

LGES predicts the North American battery market will grow between 65% and 70% this year, compared with about 45% in Europe and about 25% in China.

The company plans to increase capacity at its North American plants from 15 gigawatt hours in 2022 to 55 gigawatt hours in 2023, while increasing capital expenditure this year by more than 50%.

LGES, with a market capitalization of $95 billion, is one of the top two battery manufacturers in North America, along with Japan’s Panasonic. Globally, this is the biggest non-Chinese challenge to China CATLaccounts for 37% of the market, according to South Korea’s SNE Research.

CATL, which has a small presence in the US, has recently increased the challenge to its Korean and Japanese rivals as agreed a deal with Ford this month to license its technology to the U.S. automaker for a $3.5 billion factory in Michigan.

Lee brushed off concerns about the Ford-CATL deal, which analysts say could be discouraged by political opposition in the United States and China.

“We’re confident with the amount of market share we have,” Lee said. “We are not constrained by the lack of demand, we are actually constrained by our ability to create more supply.”

He said LGES’s ultimate goal is to surpass CATL, which has benefited from China’s booming electric vehicle market.

“The Chinese market expanded earlier than other markets in the world, and the Chinese market was not open to all competitors, so we were really not allowed to compete in the market,” Lee said. that school openly”.

“Our aspiration is clearly to be number one globally in the long run.”

Lee says the higher energy density of LGES’ nickel-rich batteries and its relationships with global automakers will give it a lasting advantage over Chinese rivals.

LGES has a global market share of 13.6%, on par with BYD, which recorded last year growth of 167.1%. The figures refer to the capacity of batteries installed in electric cars that have been sold.


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