[Exclusive] SMLab Collaborates with Overseas Automakers for Joint Development... IPO Acceleration Expected

SM Lab, the World's First Developer of 'Manganese+Nickel', Receives Love Calls from Overseas Automakers
Accelerating IPO as a 'Partner'... Increasing Corporate Value and Investor Jackpot

[Asia Economy Reporter Lee Seon-ae] SMLAB, which developed the world’s first single-crystal cathode material composed only of manganese and nickel, has signed a joint development contract with a global automobile company. This is a case where an 'innovative technology' developed by a Korean startup has attracted the attention of a global company. This technology is evaluated as a superior technology compared to the cathode materials applied to Tesla, the world’s number one electric vehicle (EV) manufacturer. If SMLAB establishes itself as a 'partner' supplying cathode materials, a core component of batteries (secondary batteries), to overseas automakers, it is expected to accelerate its initial public offering (IPO) planned for the second half of the year.

According to the investment banking (IB) industry on the 26th, SMLAB recently completed a joint development contract for two types of cathode materials with a global automobile company. Earlier, on March 16, the two companies signed two joint development program agreements, and the contract related to these was recently finalized. Since automakers have a strong will for 'battery internalization' to reduce costs by producing batteries directly and thereby secure price competitiveness for electric vehicles, market attention on SMLAB, which has been called as a 'partner,' is expected to increase.

The LMR that SMLAB is developing is a material that can replace China’s LFP (Lithium Iron Phosphate). It can increase energy density by more than twice compared to LFP, enabling the production of batteries with the same capacity that can travel the same distance using less material.

Secondary batteries consist of four core materials: cathode material (cathode active material), anode material (anode active material), electrolyte, and separator. Among these, cathode material is the most critical, accounting for about 40% of the battery price. Currently, NCM (Nickel-Cobalt-Manganese) and NCA (Nickel-Cobalt-Aluminum), which contain more than 80% nickel, are mainly used. Therefore, developing cathode materials that minimize the expensive cobalt content is key to securing price competitiveness for electric vehicles, as cobalt is twice as expensive as nickel.

Tesla’s decision to equip its basic model electric vehicles with LFP is in this context. LFP is nearly three times cheaper in material cost than the cathode materials previously used. However, the actual battery price using LFP is only about 20% cheaper than batteries using conventional materials. This is because the lower energy density characteristic requires using more material to achieve the same battery capacity as conventional materials.

SMLAB developed a cathode material that compensates for these drawbacks of LFP by mixing inexpensive manganese and nickel in a 3:1 ratio without including costly cobalt, achieving more than twice the energy density compared to LFP. This technology is superior to LFP, which Tesla has chosen as a material, and has the advantage of price competitiveness.

This is why this innovative technology has attracted attention. Jae-pil Cho, CEO of SMLAB, stated, "We succeeded in developing cathode materials that replace LFP two years ahead of competitors, the first in the world," and added, "We plan to conduct battery demonstration tests for electric vehicles from the fourth quarter after mass production verification with overseas customers," earlier this year.

SMLAB is a startup founded in July 2018. It possesses technology to mass-produce single-crystal type powders of cathode materials (NCM(A) and NCA) with nickel content above 83% without wet processing. In December last year, it raised 45 billion KRW in Series C (Pre-IPO) funding, and as of the first quarter, its cumulative investment is known to be about 109 billion KRW. Investors include Daol Investment, With One Investment, KDB Industrial Bank, KT&G, Hanyang Securities, SV Investment, Dongyu, Murex Partners, and DSC Investment. SMLAB is preparing for an IPO on the KOSDAQ market in the second half of the year, with a current market valuation of about 1 trillion KRW.