LG Energy Solution-Hanwha, Comprehensive Collaboration in Battery Sector

Joint Investment and Technology Development to Secure Leading Position in the Rapidly Growing US ESS Market

On the 16th, LG Energy Solution and Hanwha Group signed an MOU for comprehensive cooperation in the battery sector at the Plaza Hotel in Jung-gu, Seoul. From the left in the photo: Moon Seung-hak, Head of Electric Propulsion System Division at Hanwha Aerospace; Shin Young-jun, CTO of LG Energy Solution; Lee Jae-gyu, Head of GES Division at Hanwha Q CELLS; Jang Seung-se, Head of ESS Division at LG Energy Solution; Ryu Yang-sik, Head of Secondary Battery Division at Hanwha Momentum; Shin Ki-chang, Head of Electrode Technology Center at LG Energy Solution. Photo by LG Energy Solution

[Asia Economy Reporter Jeong Dong-hoon] LG Energy Solution and Hanwha Group are promoting comprehensive cooperation to target the future battery market. Through joint investment in establishing battery production lines in the United States, they aim to secure a leading position in the rapidly growing energy storage system (ESS) market driven by eco-friendly energy policies, while expanding applications to future new growth businesses such as UAM (Urban Air Mobility) to maximize synergy.

On the 16th, LG Energy Solution and three Hanwha companies (Hanwha Solutions Q CELLS Division (Hanwha Q CELLS), Hanwha Corporation Momentum Division (Hanwha Momentum), and Hanwha Aerospace) signed a memorandum of understanding (MOU) for business cooperation related to battery businesses, including the energy storage system (ESS) business.

The signing ceremony held at the Plaza Hotel in Jung-gu, Seoul, was attended by Lee Jae-gyu, Head of Hanwha Q CELLS GES Business Division; Ryu Yang-sik, Head of Hanwha Momentum Secondary Battery Business Division; Moon Seung-hak, Head of Hanwha Aerospace Electric Propulsion System Business Division; Shin Young-jun, CTO (Chief Technology Officer) of LG Energy Solution; and Jang Seung-se, Head of ESS Business Division. LG Energy Solution and Hanwha Group plan to form a task force (TF) based on this MOU to pursue specific cooperation plans in the future.

Securing Stable Battery Demand in the U.S. ESS Market... Laying the Foundation for Mid- to Long-Term Growth

First, both parties will focus on securing a leading position in the rapidly growing U.S. energy storage system (ESS) market driven by eco-friendly energy policies. To this end, LG Energy Solution and Hanwha Group will jointly invest in establishing a dedicated battery production line for the U.S. ESS market and will also develop integrated system solutions technologies, including air conditioning systems and electronic components included in ESS, in addition to batteries.

Through this cooperation, Hanwha Q CELLS will be able to secure batteries for the U.S. power market stably. With the recent expansion of renewable energy adoption, the demand for ESS to stabilize power grids and efficiently use electricity is increasing, making stable product supply crucial. In particular, the U.S. power grid ESS market is expected to grow more than ninefold from 9 GWh last year to 95 GWh by 2031 (equivalent to the amount of electricity used daily by about 40 million people in Korea) following the passage of the Inflation Reduction Act (IRA). Hanwha Q CELLS, which ranked first in the U.S. residential and commercial solar module markets, plans to become a top-class company in ESS business development and EPC fields by securing stable battery supply and procuring competitive products through this business cooperation alongside solar power.

LG Energy Solution has also secured additional stable demand channels in the U.S. market, where the greatest growth is expected, laying the foundation for mid- to long-term growth. This will further strengthen a stable three-pronged business portfolio structure spanning automotive batteries, small batteries, and ESS business. Last year, LG Energy Solution supplied the world's largest single power grid site battery of 1.2 GWh to the U.S. power generation company Vistra. Additionally, LG Energy Solution established 'LG Energy Solution Vertech' last year to enter the ESS system integration sector.

Collaboration on Battery Manufacturing Facilities and Joint Development of Special Purpose Batteries

LG Energy Solution and Hanwha Momentum will also collaborate. Hanwha Momentum is an automation engineering solutions specialist providing process equipment to various customers in secondary batteries, solar power, display, and automotive sectors.

The two companies plan to cooperate on battery manufacturing facilities. LG Energy Solution is currently constructing joint battery production plants with major automakers such as GM (Ultium plants 1, 2, and 3), Stellantis, and Honda, mainly in North America, and plans investments to expand production capacity at existing standalone plants in Ochang, Korea, Poland, and Michigan.

LG Energy Solution and Hanwha Aerospace have agreed to jointly develop special purpose batteries applicable to urban air mobility (UAM) and other fields. Hanwha Aerospace is strengthening its future new growth businesses.

An LG Energy Solution official stated, "We expect this cooperation to significantly contribute to advancing the competitiveness of each company's battery-related businesses to the next level," adding, "LG Energy Solution will do its best to expand its customer value influence in the U.S. solar and ESS businesses and provide customers with comprehensive eco-friendly energy solutions."

A Hanwha official said, "We decided to collaborate with LG Energy Solution, which is building large-scale production facilities in the U.S. to target the growing U.S. ESS market driven by eco-friendly energy policies," and added, "We will maximize synergy by cooperating in various fields such as battery manufacturing facilities and special purpose battery development both domestically and internationally."