LG is the world’s second-largest battery provider for electric vehicles (EVs), and it’s setting itself up for a long run of success. The company’s arrival on the stage isn’t an overnight success story, but rather a strategic buildup that has its sights set decades into the future with buy-in from most of the world’s largest automakers.
It all started with Lucky Cream. The multinational conglomerate now known as LG, was established as Lucky Chemical Co. in 1947 and its first product was a cosmetic cream. The chemical company opened a cosmetics laboratory in Seoul in the early ’50s before using the first injection molding machine in Korea creating things like plastic combs and soap dishes to diversify its business.
The company expanded, joined with Goldstar to create LG, building tubes and transistors for radios, fans and eventually watt meters for the German government, with exports to the U.S. starting in 1962.
Despite its long history, the LG Corporation is still mostly known for electronics and appliances in the U.S. With its catchy “Life’s Good” tagline, but in 2009 it gained attention for a new endeavor, becoming the lithium-ion battery supplier for the Chevrolet Volt.
LG Corporation
The corporation spun its energy business off in 2020, and it trails only China’s CATL in battery sales. It leads BYD and Panasonic. LG maintains a 14-percent market share as of September 2022. CATL controls about 34 percent.
As LG grew, it split off into LG Chem, LG Display, LG Electronics and LG Energy Solutions (LGES). LG told Newsweek that with the separation the company can now fully focus its expertise. LGES, the automotive battery maker, can make decisions faster to cope with a rapidly changing business environment.
“We decided 2020 was the most appropriate time to split off from LG Chem, as the battery industry had been growing rapidly and the EV battery business was beginning to yield structural profits back then,” an LG spokesperson told Newsweek.
“Moreover, the split-off and IPO made it possible for LGES to make valuable investments, such as establishing joint ventures, expanding our global operations, improving the quality of products, and developing next-generation batteries.”
LGES counts General Motors, Stellantis, Ford, Honda, Volkswagen, Audi, Volvo, Mercedes-Benz, Jaguar, Daimler and Porsche as customers and is looking to add more.
Most automakers have more than one battery supplier.
“With batteries being such important parts, Audi did not want to rely on only one supplier,” an Audi spokesperson told Newsweek.
How did they get here?
LG Energy Solution first began research on rechargeable batteries in 1992, and started mass-producing lithium-ion batteries in 1999. The next year, LGES established its first U.S. research facility and started development of lithium-ion batteries for electric vehicles.
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The plug-in hybrid Chevrolet Volt is what established LG in the American automotive market. It had both an electric motor and a small engine, but the gasoline power plant only engaged when the batteries reached a low charge. Chevrolet sold about 20,000 per year over a seven-year period between 2011 and 2018.
Volt’s success was the start of a fruitful partnership between LG and General Motors that continues to this day. In 2009, LG broke ground on its first U.S. EV battery plant in Holland, Michigan, part of a joint venture between the U.S. Government, the auto industry and LG. It started producing batteries in 2012.
The factory is currently undergoing an expansion, to 25 gigawatt-hours of production by 2025, that’s enough for about 310,000 electric vehicles per year.
“The Holland plant has created over 1,160 jobs, and LGES is currently planning an expansion that will increase capacity five-fold and create 900 new jobs. Also, LGES is one of few battery manufacturers in the U.S. that operates an EV battery R&D center here too,” said the spokesperson.
LG Corporation
LGES was still attached to GM in 2020 when it introduced its new Ultium platform for electric vehicles. The platform can be modified for almost all sizes of vehicle and started with the GMC Hummer EV and the Cadillac Lyriq. The Chevrolet Bolt EV and EUV use LG battery cells too, but it is not on the Ultium platform.
Vehicles produced for the U.S. market by General Motors exclusively use LG batteries, though its joint-venture operations in China use other manufacturers. GM says it picked first LG because it already had a relationship with the company on the Bolt and the Volt, but also because it has a plan for coming technology changes.
“We chose to partner with LG due to their electrochemical expertise which is a great fit in our Ultium Cells LLC joint venture with our modern, clean, high-volume manufacturing footprint. LG also has some remarkable processes like the ability to consistently manufacture uniformly stacked electrodes, which can help us quickly pivot to new battery cell anode technology as our formulas advance over the next decade,” a GM spokesperson told Newsweek.
LG says that its investments in R&D, its global production network, its product portfolio and its pursuit of sustainability set it apart from the other battery makers.
LG Corporation
“As the first company to begin research on rechargeable batteries worldwide, LGES holds the largest number of battery technology-related patents (25,192 patents as of 2022) in the world. We have invested approximately $4.2 billion in battery R&D in the past 10 years, and we have over 3,300 employees working at our R&D centers globally,” an LG spokesperson said.
“LGES has established the largest manufacturing network in the battery industry with its manufacturing facilities currently running in South Korea, U.S., China, and Poland. Soon, Canada and Indonesia will be added to the list.”
The company also offers product platforms of all types and sizes, satisfying different types of clients. It offers both pouch-type and cylindrical batteries.
“In pouch-type batteries, we’re offering advanced solutions in terms of energy density and quick charging, and will continue to develop new cost-competitive chemistries going forward. In cylindrical batteries, we aim to lead the market by securing production capabilities for the new 4680 battery with advanced energy density and cost-competitiveness,” she said.
In addition to electric vehicles LGES batteries power other devices like smartphones and laptops, as well as LEVs (Light Electric Vehicles), power tools and wireless earphones. It’s also developing and providing high-energy and high-output products for clients who apply our batteries to power grids for commercial and residential uses.
LG Corporation
What’s next?
The company still sees room to grow with new partners.
“We’re also investing in cultivating new business areas in battery and energy industries such as BaaS (Battery as a Service, offering battery data analytics and managing battery life cycle, providing solutions to optimize the residual values of the battery) and EaaS (Energy as a Service, improving energy efficiency and resolving power shortages), and we believe these new approaches would unfold new business opportunities and advance the global transition to clean energy,” the spokesperson said.
It’s also tinkering with various chemical makeups. It’s adding more aluminum into its nickel, cobalt, manganese, aluminum (NCMA) batteries to improve structural stability, outputs, cycle life, power capacity, and resistance.
“We initiated the mass-production of NCMA in the second half of 2021, and they will be powering most models of GM’s next-generation EVs. Going forward, we’re exploring single crystal NCMA cathode and silicon anode chemistry (in both pouch-type and cylindrical batteries), as well as cost-competitive chemistries such as high-voltage, mid-nickel NCM, LFP, manganese-rich chemistries in pouch-type batteries.”
For the next-generation, LG Energy Solutions is concentrating on solid-state batteries. They’re more efficient, have more range and are more stable than liquid batteries. It wants to develop a polymer-based solid-state battery by 2026, and sulfur-based solid-state battery by 2030.
