LG Chem-SK Inno, Investment to Secure Lead in US Electric Vehicle Battery Market

LG Chem Purchases Rosetown Factory Site with GM... Construction to Start in First Half of the Year

SK Innovation to Complete Commerce, Georgia Plant Next Year... Prototype Production

[Asia Economy Reporter Park Soyeon] Domestic battery companies such as LG Chem and SK Innovation are competitively expanding their electric vehicle battery production bases in the United States to secure market leadership. As Korean companies consecutively secure global production bases in the U.S., a key region leading the global electric vehicle market, their status is rising.

According to foreign media and industry sources on the 17th, General Motors (GM) recently signed a contract to purchase a 639,000㎡ site in Rosetown, Ohio, USA. This site is for an electric vehicle battery factory to be established together with LG Chem. GM is currently obtaining permits and plans to start construction as soon as all administrative procedures are completed. LG Chem stated, "We plan to begin construction within the first half of the year." The site will produce electric vehicle batteries with an annual capacity of 30GWh to supply GM, enough for up to 400,000 electric vehicles.

With this, LG Chem secures its second production base in the U.S., following the Holland plant in Michigan, which began operations in 2012. Globally, LG Chem now has a total of seven production bases, including five wholly-owned plants and two joint ventures. This aggressive investment by LG Chem is yielding results, with electric vehicle battery sales expected to reach 10 trillion KRW this year. The battery division is also forecasted to return to profitability this year. Market analysts predict that LG Chem will surpass CATL, China’s largest battery manufacturer, in mid-to-large battery sales for the first time.

SK Innovation, which is engaged in a 'trade secret infringement' lawsuit with LG Chem in the U.S., is also making strong advances. SK is building a 1,124,000㎡ battery plant in Commerce, Georgia. Once completed, the plant will produce batteries with an annual capacity of 9.8GWh. The entire site can accommodate five plants of this scale.

The plant, scheduled for completion in the second half of next year, will begin prototype production next year and commercial production in 2022. SK plans to mass-produce third-generation electric vehicle batteries capable of driving over 500 km at this site. SK also plans to start construction of a second plant within this year. By 2022, SK aims to complete a global four-corner production system including plants in Seosan, Korea; China; and Hungary. Battery production capacity will expand from the current 19.7GWh (enough for 400,000 electric vehicles) to 60GWh. For the U.S. plants, the first plant will have capacity for batteries for 200,000 electric vehicles, and the second plant will have capacity for 400,000 electric vehicles.

The U.S. electric vehicle market is considered one of the world’s top three markets alongside China and Europe. According to Mirae Asset Daewoo Research Center, the U.S. electric vehicle market is expected to grow at an average annual rate of 26%, from 520,000 units last year to 910,000 units in 2021 and 1.32 million units in 2023. Especially in the U.S., advanced e-mobility technologies such as autonomous driving and BaaS (Battery as a Service?a strategy to create new service platforms with batteries) are actively being researched, centered around Silicon Valley in the West.

An industry official said, "In the technology-intensive electric vehicle battery industry, the U.S. will lead the paradigm shift in the market going forward," adding, "As the global electric vehicle era officially begins, Korean battery companies will demonstrate a strong presence in the U.S., which leads the electric vehicle industry."