LG Energy Solution to Supply Batteries for 50,000 Electric Commercial Vehicles to US FEPS

Securing the Electric Commercial Vehicle Market with Over 40% Annual Growth Rate

[Asia Economy Reporter Choi Seoyoon] LG Energy Solution is officially launching its market penetration by signing a large-scale battery supply contract in the electric commercial vehicle (buses, trucks, etc.) sector, which is expected to experience high growth in the future.

On the 2nd, LG Energy Solution announced that it has signed a long-term supply contract for electric vehicle battery modules with FEPS (Freudenberg E-Power Systems), which manufactures and sells BMS (Battery Management System) and battery packs targeting the North American and European markets.

Under this contract, LG Energy Solution will supply FEPS with battery modules totaling 19GWh starting next year. This amount is enough to produce more than 50,000 high-performance commercial vehicles (270,000 high-performance electric vehicles).

FEPS is a company under the German Freudenberg Group and was established in 2018 by acquiring Xalt Energy, a North American pouch cell developer and BMS/pack manufacturer and seller. It operates a giga factory in Midland, Michigan, USA, for pack and module assembly.

(From left) Park Injae, OTS Manager at LG Energy Solution; Oh Yoosung, Executive Director of the Automotive Marketing Center; Kim Dongmyung, President of the Automotive Battery Division; Nils Martens, FEPS CCO; Dr. Jan Kuiken, CTO; and Marco Peisik, SVP, are posing for a commemorative photo after the signing ceremony at LG Energy Solution headquarters. Photo by LG Energy Solution

Electric vehicle batteries are divided into cells, modules, and packs according to assembly units. A module is a frame containing multiple battery cells to protect them from external shocks, heat, and vibrations, and a pack is a collection of these modules equipped with various control and protection systems.

FEPS plans to assemble LG Energy Solution’s battery modules into packs and sell them to major North American commercial vehicle companies, including large buses and electric trucks.

The electric commercial vehicle market is relatively smaller compared to the passenger car market, but since each vehicle carries a large amount of battery capacity and long-term supply contracts are possible, the battery industry considers it a ‘high value-added strategic market.’ Especially in the North American and European markets, environmental regulations on internal combustion commercial vehicles are tightening, leading to rapid market growth.

According to market research firm SNE Research, the global electric commercial vehicle (based on LCV/MHCV/buses) battery market is expected to grow from 37GWh in 2022 to a maximum of 574GWh by 2030. The average annual growth rate exceeds 40%.

LG Energy Solution stated, “The electric commercial vehicle market has an overwhelmingly high proportion of standardized battery installations, and LG Energy Solution, as a leading battery company, has been conducting module and pack businesses proactively, possessing a large lineup of standardized modules, giving it a competitive edge in the market.”

LG Energy Solution plans to enhance its market leadership in the North American and European electric commercial vehicle markets by leveraging its strengths demonstrated in the electric vehicle market, including ▲ possession of various form factors such as cylindrical and pouch ▲ leading module and pack business with a large lineup of standardized modules ▲ provision of safety diagnosis solutions utilizing BMS capabilities ▲ stable quality management through internal development and quality processes.

On this day, Kim Dongmyung, President of LG Energy Solution’s Automotive Battery Division, said, “The partnership with FEPS is a signal for securing a leading position in the highly promising electric commercial vehicle market. We will realize the highest customer value with differentiated capabilities accumulated across all battery fields, from battery cells to modules, packs, and BMS.”

FEPS CEO Max Clay said, “Through the partnership with LG Energy Solution, we will reliably supply the highest quality batteries to customers in the rapidly growing electric commercial vehicle market and further solidify our market leadership.”