2024-07-02 15:54:20
5-year supply contract worth trillions of won
Pure electric vehicle production capacity of 590,000 units
Contract signed with Australia to secure lithium supply chain
▲Page 18 LG Energy Solutions successfully won a large order for lithium iron phosphate (LFP) batteries, a mid- to low-priced product that has been dominated by Chinese products. Some reviews say that K-Battery, which is worried regarding stagnant growth due to the electric vehicle gap (temporary slowdown in demand), is expanding the market by improving cost-effectiveness.
LG Energy Solutions announced on the 2nd that it signed a supply contract for bagged lithium iron phosphate batteries for electric vehicles with the electric vehicle division “Ampere” of Renault, France’s largest automobile company, on the 1st (local time) in Paris, France.
The supply period is five years from the end of next year to 2030. The total supply scale is regarding 39GWh (gigawatt hours), which is enough to produce regarding 590,000 pure electric vehicles. According to the contract between the two companies, LG Energy Solution did not disclose the specific contract amount, but the industry estimates it to be around trillions of won. The batteries will be produced at LG Energy Solutions’ plant in Wroclaw, Poland, and will be installed in Renault’s next-generation electric vehicle models.
Industry experts said that starting from this contract, it has opened the way for domestic companies to compete with China in Europe, one of the world’s three largest automobile markets, and increase market share.
Lithium iron phosphate batteries are the flagship products of Chinese companies such as CATL and BYD. Due to their low energy density, their disadvantages are relatively short driving range, but due to the use of iron and phosphorus, they are relatively cheap and safe. . So far, domestic companies have stood out in the high-energy-density, large-capacity ternary cell (NCM) battery market. However, as demand for electric vehicles slowed last year, leading to slower industrial growth and intensified price competition, demand for lithium iron phosphate batteries increased, and domestic companies began to enter the lithium iron phosphate battery market in earnest.
The characteristic of the lithium iron phosphate batteries that LG Energy Solutions decided to supply this time is that it has enhanced product competitiveness by applying the cell-to-pack (CTP) process solution to soft pack batteries for the first time. Cell-to-Pack technology is a process technology that can assemble battery packs without going through the module process. The explanation for this is that the low energy density of lithium iron phosphate can be improved by eliminating the module stage in existing battery configurations and assembling the cells directly into the battery pack to increase the energy density in the same space .
At the same time, LG Energy Solutions appears to be reducing its dependence on China by investing heavily in strengthening its supply chain for key raw materials. LG Energy Solutions announced today that it has signed a large-scale lithium concentrate supply and convertible bond (CB) investment contract with Australian lithium mining company Liontown.
According to this contract, the 15-year supply of lithium concentrate will reach 1.75 million tons starting at the end of this year at the earliest. This is enough to produce batteries for regarding 5 million high-performance electric vehicles, which can travel more than 500 kilometers on a single charge. Lithium concentrate is the raw material for lithium hydroxide, a key material in high-capacity electric vehicle batteries.
LG Energy Solutions has also signed a CB contract worth US$250 million (approximately 345 billion won), and the principal and interest can be repaid with bonds or stocks depending on the value and stock price of Liontown.
Reporter Kim Hee-ri
1719936848
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