Taking Aim at Tesla
LG Chem and General Motors (GM) have put forward a plan to overtake Tesla, the world's No. 1 producer of electric vehicles (EVs), based on next-generation NCMA (nickel, cobalt, manganese and aluminum) batteries. The two sides plan to start mass production of the new batteries in 2022. They intend to lower battery prices to below US$100 per kilowatt by building a Gigafactory-level NCMA plant.
The two companies are planning to use the new NCMA batteries for a new EV model that will be launched in 2022.
NCMA batteries reduce the proportion of cobalt, which is a rare metal, to a one-digit percentage, and adds aluminum to maintain the same stability as current products, while lowering unit cost and increasing output. Cobalt price was US$33,000 per ton on March 6, but aluminum price was only US$1,687 per ton on the same day.
In addition, increasing nickel content without reducing cobalt content also elevates output per unit area. In NCMA batteries, cobalt content is reduced to around 5 percent and nickel content is raised to 90 percent, which can significantly lower the battery price per kWh compared to NCM batteries, which have nickel 60 percent, cobalt 20 percent and manganese 20 percent.
Last week, GM held the EV Week Event to unveil its next-generation EV platform. It announced that it will lower its battery cell cost below US$100 per kWh by establishing a joint venture with LG Chem. Industry analysts say that mass-produced EV batteries are priced at around US$150 per kWh, and batteries account for about 40 percent of EV manufacturing cost.
LG Chem and GM signed an agreement on Dec. 5, 2019 to establish a 50:50 EV battery cell joint venture by investing 1 trillion won each. The size of the planned plant is comparable to Gigafactory (35 GWh) set up by Tesla and Panasonic.
During the EV Week, GM CEO Mary Barra announced that GM planned to launch 20 new EV models by 2023 and roll out more than 1 million EVs a year by 2025.
In 2019, GM sold 24,600 units of the Bolt EV in the world market, suffering a crushing defeat in competition with Tesla, which sold 367,500 units. However, the company plans to get in hot pursuit of Tesla by rapidly increasing its EV lineup from mid- to low-price models to the premium brand Cadillac.