LG Energy Solution Expands US Battery Plant... Domestic Secondary Battery Equipment Companies Anticipate Spillover Benefits

[Asia Economy Reporter Jang Hyowon] LG Energy Solution announced strong performance last year and set a goal to increase annual sales by 25-30% compared to the previous year. The company plans to increase investment by more than 50% from 6.3 trillion KRW last year to expand global production facilities.

Accordingly, as demand for battery equipment used in production lines increases, domestic related companies are expected to benefit indirectly.

DNT announced that in December last year, it signed supply contracts worth 2.4 billion KRW with the Indonesian Hyundai-LG Energy Solution joint venture and 2 billion KRW with LG Energy Solution related to battery manufacturing and sales. Since 2020, DNT has had references for supplying secondary battery equipment to LG Energy Solution, and additional orders are expected due to the expansion of the client’s overseas factories.

DA Technology also announced in December last year that it signed a supply contract worth 46.7 billion KRW for secondary battery equipment with LG Electronics. The equipment is expected to be used for LG Energy Solution’s overseas factory expansion. DA Technology also holds delivery references for LG Energy Solution and has a lineup for high-quality cell production, including notching, stacking equipment, and cylindrical battery assembly lines, so it is forecasting strong performance growth this year based on orders secured last year.

Recently, NextStar Energy (hereinafter NextStar), an electric vehicle battery joint venture between LG Energy Solution and Stellantis, began construction of a battery module and cell production plant in Ontario, Canada. The NextStar plant plans to start battery module production in the first quarter of 2024 and battery cell production in the first quarter of 2025, with battery cell manufacturing equipment expected to be delivered from early 2024.

Additionally, LG Energy Solution and Japan’s Honda announced on the 9th that they secured subsidies worth 150 million USD (approximately 189 billion KRW) in Ohio, USA, indicating that the global production line establishment is progressing smoothly. As the positive market conditions continue, expectations are growing for the benefits to related battery equipment companies.