LG New Energy will deliver 20 GWh of automotive battery modules to Toyota starting in 2025. The modules are composed of high-nickel NCMA (nickel, cobalt, manganese, aluminum) pouch cells and will be manufactured at LG New Energy’s Michigan factory. Production.

This battery supply agreement can help Toyota expand its pure electric product line. In Toyota’s plan, new pure electric models will be assembled and produced in Kentucky, USA, in 2025 to further promote electrification development. Toyota plans to launch 30 pure electric models under the Toyota and Lexus brands in 2030, with annual production expected to exceed 3.5 million vehicles.

It was previously reported that Toyota plans to increase its annual production capacity of electric vehicles, with an estimated annual production capacity of 190,000 vehicles next year; 600,000 vehicles in 2025; and 1.5 million vehicles in 2026.

Toyota also plans to independently develop and design a new traction battery by 2026, and plans to achieve annual production of 3.5 million vehicles by 2030.

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According to foreign media reports, Georgia has announced that Hyundai Motor Group and LG New Energy will increase investment. Reaching 7.59 billion U.S. dollars, it means that the investment in building the plant has increased by more than 2 billion U.S. dollars compared with the 5.54 billion U.S. dollars announced by Hyundai Motor Group in May last year.

Foreign media also disclosed in the report that due to the impact of inflation, the construction cost of Hyundai Motor Group and LG New Energy’s Georgia plant has increased by more than 30% compared with the original plan, which is also the main reason for their increased investment.

After the increase in investment, Hyundai Motor Group will still be the main investor. Foreign media reported that Hyundai Motor Group initially planned to invest US$3 billion in electric vehicle dedicated factories and US$2 billion in joint venture battery factories. Investment in joint venture battery factories is expected to exceed $4.3 billion.

According to the plan, Hyundai Motor Group’s dedicated electric vehicle factory in Georgia will be put into operation in the second half of next year, producing Hyundai, Kia and Genesis models, with a planned annual production capacity of 300,000 vehicles.

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The latest financial report released by LG New Energy, the battery manufacturer with the largest share in the world, shows that their revenue has increased significantly in the first quarter, and their operating profit has also improved.

The financial report shows that LG New Energy’s revenue in the first quarter of this year was 8.747 trillion won, a quarter-on-quarter increase of 2.5%, a year-on-year increase of 101.4%, and revenue hit a new high.

Judging from the financial report, revenue in the first quarter of this year has increased year-on-year, which means that LG New Energy’s revenue has maintained growth for five consecutive quarters since its IPO.

For the revenue growth in the first quarter, Chang Sil Lee, CFO of LG New Energy, benefited from their timely business strategy decision and actively responded to the increase in demand in North America. After the stable operation of the joint venture factory in Ohio, shipments also increased. Selling prices also improved in the first quarter.

In terms of profit, the financial report shows that LG New Energy’s net profit in the first quarter increased from 226.6 billion won in the same period last year to 562 billion won. From January to March this year, LG New Energy’s operating profit reached 633.2 billion won, a year-on-year increase of 144.6%, and a month-on-month increase of 166.7%; sales more than doubled from 4.34 trillion won to 8.74 trillion won.

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LG New Energy, which has decided to invest 7.2 trillion won, or about 5.5 billion U.S. dollars in the construction of a lithium iron phosphate battery factory in Arizona, can also receive relevant subsidies from the United States.

However, judging from the latest reports, LG New Energy is currently considering accepting cash subsidies from the United States instead of tax credits.

Sources revealed that LG New Energy is currently said to be studying whether it will receive cash subsidies under relevant US programs and whether there will be accounting issues.

Foreign media mentioned in the report that according to the new subsidy program launched by the United States, manufacturers eligible for subsidies can choose between tax credits and cash.

In the two subsidy methods, the cash subsidy will be included in the operating profit, which can significantly improve future performance; although the tax credit can directly offset the tax, it has certain limitations and is only applicable to the corporate tax linked to the net profit. The tax rate is 21%, and if the net profit is small, the gains will be more than they actually need to pay in taxes.

In terms of batteries, manufacturers such as LG New Energy can receive a cash subsidy of US$35 for each 1kWh battery cell produced, and a 1kWh battery module can receive a cash subsidy of US$45.

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Lithium iron phosphate batteries use cheaper, more abundant metals as raw materials, and most importantly, the chemical composition is less volatile, which makes iron phosphate batteries safer than batteries that require nickel and cobalt.

In February of this year, foreign media reported that LG New Energy is developing lithium iron phosphate batteries for electric vehicles. The lithium iron phosphate batteries developed by the company will use cobalt-free cathodes and be of the pouch type, rather than the prismatic or cylindrical cells favored by Chinese battery makers. The company’s goal may be to supply lithium iron phosphate batteries to Tesla.

At the time, the source said the company aimed to make the battery outperform the battery produced by its rival CATL, with a 20% higher energy density than CATL’s battery for Tesla’s Model 3.

Before producing lithium iron phosphate batteries for electric vehicles, Kwon Young-soo said that LG New Energy will start producing lithium iron phosphate batteries for energy storage systems this year.

He also said that talks between LG CELL and Toyota Motor over a potential collaboration, including the possibility of a joint venture, are progressing well, without elaborating.

LG New Energy is a new company spun off from LG Chem in December 2020, specializing in the battery business, and its customers include Tesla, General Motors and Volkswagen. After the spin-off, LG Chem will hold 100 percent of the new company.

In January of this year, foreign media reported that LG New Energy plans to develop a lithium-sulfur battery within three years, which means the company aims to commercialize the battery in 2027.

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Honda and LG New Energy established LH Battery in August last year, planning to build a new electric vehicle battery factory in the United States to provide batteries for Acura models assembled in the United States by Honda. According to the plan, the annual battery production capacity of the plant will reach 40 gigawatt-hours. The initial investment between the two companies was $3.5 billion, which was subsequently increased to $4.4 billion.

“To achieve our goal, we must start building this battery plant to supply batteries for our electric vehicles here in Ohio for mass production starting in 2025,” said Toshihiro Mibe, Honda President and Fuel Cell Electric Vehicles, ” Honda has a heritage of building quality where it’s needed. Because we want to provide American customers with high-quality vehicles, we naturally want to make the cars and batteries stateside.”

According to reports, the battery plant will create 2,200 jobs, which are expected to come from Dayton, Cincinnati, Columbus and parts of Appalachia, as well as Fayette County.

In addition to the battery plant, Honda is spending $700 million to restructure three plants in Ohio — Marysville Auto Works, East Liberty Auto Plant and Anna Engine Plant — to make and supply electric vehicles.

According to their goals: by 2040, all of its sales will come from electric and fuel cell vehicles, and by 2050, all products and corporate activities will be carbon neutral. (Honda’s first pure electric vehicle in China – Dongfeng Honda e: NS1 was launched last year)

“This is the first chapter in our shared history,” said LH Battery CEO Robert Lee as he unveiled renderings of the factory with COO Rick Riggle . “Our joint venture is special.”

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LG New Energy reported full-year 2022 consolidated revenue of KRW 25.6 trillion and operating profit of KRW 1.2 trillion, up a record 43.4 percent and 57.9 percent, respectively, from the previous year. Consolidated revenue for the fourth quarter was KRW 8.54 trillion and operating profit was KRW 237.4 billion, up 92 percent year-over-year, due to increased sales of electric vehicle batteries from key customers, increased production at the Ultium Cells plant in Ohio, and increased production of energy storage systems (ESS).

LG New Energy expects the fastest growing EV market in North America due to the operation of two Ultium Cells plants in Ohio and Tennessee, which will have a capacity of 55GWh.

The South Korean company, which is currently supplying other car companies such as Tesla and General Motors, reported an operating profit of 237 billion won (about 1.304 billion CNY) for the October-December period, compared with 76 billion won a year earlier. That compares with an average forecast of 256 billion won by Refinitiv SmartEstimate analysts.

LG New Energy said it expects nearly half of its global battery capacity to be earmarked for the North American market. Talks are underway with Tesla and other electric vehicle startups to supply batteries from its proposed Arizona battery plant.

In addition, the company missed analysts’ expectations due to one-time costs such as reserves and year-end bonuses related to energy storage systems. LG Energy said in a regulatory filing that revenue rose 92 percent to 8.5 trillion won in the quarter.

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The joint venture will begin construction of a new battery plant early this year, with the goal of completing construction by the end of 2024 and beginning mass production of advanced lithium-ion battery cells by the end of 2025. The plant aims to have an annual production capacity of approximately 40 GWh. All batteries produced by the new joint venture will be supplied exclusively to Honda’s plants in North America to power battery electric vehicles sold in North America.

The new plant will be located in Fayette County, about 64 kilometers southwest of Columbus, near Jeffersonville. LG New Energy and Honda have committed to invest $3.5 billion (about 23.59 billion RMB) and create 2,200 jobs to build the new production facility. The companies’ overall investment related to the joint venture is expected to reach $4.4 billion (approximately RMB 29.656 billion).

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Industry sources said LG New Energy is developing a prototype electric vehicle based on pure silicon cells and began full performance evaluation tests on it in August. I know they have developed pure silicon technology that doesn’t need to be improved,” said another person familiar with the matter. The company plans to continue evaluating the prototype”

100% pure silicon refers to the battery cathode material made of pure silicon, which can store 10 times more energy compared to the current widely used graphite material, so major companies are trying to use silicon instead of carbon. Tesla, for example, drew market attention by proposing the use of pure silicon at Battery Day 2020, while Shin Hak-chul, vice chairman of LG Chem, LG New Energy’s parent company, highlighted the development of pure silicon batteries as a priority in a growth strategy announcement last February.

However, this material has an obvious drawback, as silicon contains more lithium ions than graphite, making it much larger. Therefore, even if silicon could be successfully used as an electrode material, its usage would be very limited. That is why LG New Energy’s development and planned testing of a pure silicon prototype is seen by the industry as a major technological breakthrough achieved by the company.

According to reports, LG New Energy successfully reduced the size of silicon to the smallest size currently achievable – 5 microns. It is estimated that it will not only help improve performance but also help to reduce the size of the battery. When it is finally successfully commercialized, it can greatly improve the battery life and charging performance of electric vehicles and has a certain price competitiveness. After all, silicon per unit capacity is cheaper than graphite.

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According to market tracker FnGuide, LG New Energy’s revenue is expected to grow 41.4 percent year-on-year to 25.2 trillion won (about 137.592 billion yuan) this year. Net profit is expected to jump 95.3 percent to 1.5 trillion won (about 8.19 billion yuan), surpassing the 1 trillion won mark for the first time.

SK On is expected to achieve revenue of 6 trillion won (about 32.76 billion yuan), having made a profit after being spun off from SK Innovation last year.

In October this year, the power battery installation ranking, three Korean battery giants LG New Energy, SK On, and Samsung SDI ranked third, fifth, and sixth, with a market share of 11.3%, 5.4%, and 4.9%, respectively.

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