LG Energy Solution is looking to keep ramping up its battery businesses in the US as the North American electric vehicle market is projected to see a compound annual growth rate of 33 percent through 2030.
According to the South Korean battery maker, the company’s backlog orders reached 370 trillion won ($284 billion) as of September last year, an increase of over 100 trillion won from the end of 2021. Of the backlog orders, 70 percent were due for the North American market.
LG Energy Solution previously announced the mid- to long-term goal of tripling its yearly revenue and achieving a double-digit operating profit increase in the next five years. The company logged record-high numbers last year with its revenue and operating profit surpassing 25 trillion won and 1 trillion won, respectively, on strong shipments across all products including EV battery and energy storage systems.
The company said it will bolster competitiveness centered around local production capacity, customers, products and smart factories.
The Korean battery maker is operating or has agreed to build joint battery plants in the US with leading carmakers such as General Motors, Stellantis and Honda. LG Energy Solution customers make eight out of the top 10 global automakers, the firm said.
Once the plants under construction become operational by 2025, LG Energy Solution is expected to have an annual production capacity of over 250 gigawatt-hours in North America alone, the largest capacity for a single battery maker in the country, it said.
LG Energy Solution said it will enhance its product portfolio by producing EV battery cell pouches and cylindrical batteries at the US manufacturing sites. The company also plans to apply smart factory technologies for the production lines that will start operation after 2025 in order to increase the yield rate, stabilize quality and advance productivity.
Regarding the Biden Administration’s Inflation Reduction Act aimed at revitalizing domestic manufacturing, LG Energy Solution is stepping up measures to set up a US value chain. The company has been working with local partners to secure the supply of key materials such as cathodes, anodes and electrolytes while seeking cooperation with companies based in countries that have signed free trade agreements with the US to obtain nickel, lithium and cobalt.
“With such efforts, we will increase the localized proportion of key materials to have 63 percent of cathode and 72 percent of essential minerals from North America or FTA-signed countries in the next five years,” LG Energy Solution said in a statement.
The battery maker is putting efforts into creating a lifecycle system of batteries by collaborating with recycling companies to cover the production of raw materials, battery consumption and recycling of batteries.
LG Energy Solution took the place in the global battery market share last year, according to market tracker SNE Research. The company’s battery sales amounted to 101 GWh, behind China’s CATL at 323 GWh.