LG Energy Solution is ramping up battery production capacities
LG Energy Solution has decided to use its Arizona plant for the production of large 46 cylindrical cells (46 millimetres in diameter) from the end of 2025. The battery manufacturer is thus changing its previous plan, according to which cells of the 2170 format were to be produced in this plant.
In the course of the change of plan, the capacity of the US plant will be increased from the previously planned 27 gigawatt-hours to 36 GWh annually, as LGES announced in the context of its latest quarterly figures. According to a report by Business Korea, LG Energy Solution in Arizona will produce cells of the 4680 format, meaning with a diameter of 46 mm and a height of 80 mm. These battery cells are primarily used by Tesla, making it likely for the US-American company to be the main customer. Reuters reported in March that Panasonic and LG Energy Solution are to supply the 4680 cells for the cyber truck. The expansion of production capacity for the 46mm cells is also expected to strengthen cooperation with other carmakers.
“Besides the 4680, we are in the process of developing various other 46 series batteries,” LGES CFO Lee Chang-sil is quoted as saying by Business Korea. “We are aiming to establish a production line within this year in Korea and are preparing to start production in the second half of next year.” For the development of the large cells, LG Energy Solution uses its plant in Ochang, South Korea. According to the new information, the production start of the pilot line there should take place in the second half of 2024.
Additionally, LG Energy Solution is planning to start manufacturing high-voltage mid-nickel products by 2025, as well as customizable solutions for customers. Here, the company aims to focus their products on the budget electric vehicle market “beyond the premium market”. This is not to mean that LG ES will not be taking care of the premium market, where it plans to sell high-nickel nickel-cobalt-manganese (NCMA) batteries. Here, the nickel content will be increased from a “high 80% range to over 90%”. In addition, “enhancements will also be made in thermal management solutions for improved safety, and they intend to leverage high-capacity, high-efficiency silicon anode materials to reduce 0% to 80% charging times to under 15 minutes.”
The reason for the diversification is simple, as the company is responding to market demand: “With demand slowdown in Europe, EV production adjustment from OEMs, and reflection of metal price into average selling price (ASP) erosion, we saw a modest decline in our quarterly revenue,” explained Chang Sil Lee. “Nonetheless, operating profit increased thanks to product mix improvement, enhanced productivity of new lines, and efforts for expense efficiencies.”
Just a few weeks ago, LG ES signed a battery supply agreement with Toyota in the USA as well, making the production ramp-up there an important step. This is not the only market that the company is looking at, however, as there are also efforts to set up production in India, as well as a new recycling business in China.