US and Europe Begin, Expanding to Asia and Middle East
"Only 'Top-Tier' CPOs Consider M&A"
LG Electronics has announced an ambitious plan to chase Switzerland's ABB, the world's number one manufacturer of electric vehicle fast chargers, and form a leading competition by 2025. To this end, LG Electronics plans to strengthen its sales efforts in Asia and the Middle East, starting with the launch of fast chargers in the US in the second quarter and Europe in the second half of this year.
Jang Ik-hwan, Vice President and Head of LG Electronics' Business Solutions (BS) Division, recently told reporters at the 'EV Trend Korea 2024' event held at COEX in Samseong-dong, Gangnam-gu, Seoul, "Our goal by next year is to surpass ABB." Vice President Jang leads LG Electronics' B2B (business-to-business) operations, including electric vehicle chargers.
Switzerland's ABB is recognized as the company with the highest technology in direct current (DC) fast chargers worldwide. To charge an electric vehicle battery, alternating current (AC) power must be converted to direct current through a 'power module' inside the fast charger. ABB was the first in the industry to commercialize 600-kilowatt (kW) ultra-fast charging technology. The company has sold more than one million electric vehicle chargers, including about 50,000 DC fast chargers, in 85 countries worldwide. Although exact market share figures are difficult to ascertain, ABB is reported to be significantly ahead of competitors such as LG Electronics in terms of technology and sales performance.
LG Electronics plans to launch fast chargers in the US in the second quarter and in Europe in the second half of the year. The recently operational Texas factory aims to mass-produce 175 kW fast chargers in the first half of the year. In the second half, it plans to produce 350 kW ultra-fast chargers. In the European market, LG Electronics is in contact with charging infrastructure service operators (CPOs).
Jang Ik-hwan, Vice President and Head of LG Electronics BS Business Division (wearing a green tie on the left), is listening to explanations about LG Electronics products, including a 7kW fast charger, at the LG Electronics booth during the "EV Trend Korea 2024" event held on the afternoon of the 7th at COEX, Samseong-dong, Gangnam-gu, Seoul. [Photo by Moon Chae-seok]
LG Electronics is also considering mergers and acquisitions (M&A) of the top one or two CPO companies. Vice President Jang said, "We plan to include acquisition targets when the electric vehicle infrastructure base expands and CPOs start generating substantial profits."
To meet the US government subsidy condition of 'at least 55% local content' under the US Inflation Reduction Act (IRA), LG Electronics plans to collaborate with domestic competitors such as SK Signet and EVSIS, a subsidiary of Lotte Information & Communication.
Vice President Jang explained, "Since the metal volume for the enclosure, which accounts for a large portion of the material cost in fast chargers, is large, it is necessary to produce locally in the US at the early stage of the business. Finding local manufacturers with excellent production capabilities can reduce costs. Until then, we can collaborate with domestic competitors."
LG Electronics is making company-wide efforts to grow its electric vehicle charging business to a trillion-won scale in annual sales. CEO Cho Joo-wan announced 'Vision 2030' last July, aiming to develop LG Electronics into a company with 100 trillion won in sales, citing 'electrification' as one of the growth engines to achieve the future vision. As automakers such as Mercedes-Benz, BMW, Tesla, and General Motors (GM) accelerate the construction of their own charging infrastructure, increasing market share is an urgent priority.
Vice President Jang stated, "We will increase orders from major automaker customers such as Tesla and achieve a 10% market share in the US by around 2030."
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