LG to Set up First European Electric Vehicle Parts Plant in Hungary

LG will establish its first European electric vehicle parts plant in Hungary. The automotive electronics business is LG’s flagship business with a cumulative order backlog of 100 trillion won at the end of the year. The average annual growth rate over the past 10 years has reached 30 percent. LG Electronics’ strategy is to accelerate the expansion of its global automotive electronics business, focusing on Europe.

LG Magna e-Powertrain announced at a press conference on Sept. 4 (local time) ahead of the opening of IAA Mobility 2023 in Munich, Germany, that it will build an electric vehicle parts plant in the city of Miskolc in northeastern Hungary.

LG Magna e-Powertrain plans to build the plant with a total floor area of 26,000 square meters by 2025. This will be the company’s fourth plant after those in Incheon, Korea; Nanjing, China; and Ramos Arizpe, Mexico. It will also be the company’s first in Europe, an important market for electric vehicles. The overseas plants are expected to contribute significantly to expanding LG Magna e-Powertrain’s European and global business.

The Hungarian plant produces drive motors and will eventually produce key components for electric vehicle powertrains to meet customer demand. The electric vehicle powertrain is the heart of an electric vehicle, consisting of a drive motor, an inverter, and a converter that generates and transmit power. Upon completion, the plant will hire about 200 new employees.

LG Magna e-Powertrain said it chose Hungary as its European production base because of its proximity to major European automotive electronics customers and synergies with Magna.

Miskolc has developed automotive and machinery industries and excellent logistics and transportation infrastructure. Major European automobile factories are located near the plant. Hungarian government and Miskolc city officials are very supportive of LG Magna e-Powertrain’s new plant.

At the LG Electronics Future Vision presentation in July, LG Electronics President Cho Ju-wan announced that the company will lead the future electric vehicle powertrain market by strengthening synergies with Magna and expanding markets such as North America and Europe. LG Magna e-Powertrain is a joint venture established in July 2021 between LG Electronics and Magna.

LG Electronics is developing its automotive electronics business centered on three core business areas -- in-car infotainment systems (VS Division), electric vehicle powertrains (LG Magna e-Powertrain), and vehicle lighting systems (ZKW).

As the future mobility era of electric vehicles and autonomous vehicles approaches, the automotive electronics business is emerging as a growth driver for LG Group. In the first half of this year alone, the automotive electronics business posted sales of 5.51 trillion won, accounting for 12.5 percent of LG’s total first-half sales. Its order backlog is expected to reach 100 trillion won by the end of this year.