By Expanding Production Bases at Home and Abroad
LG Energy Solutions is looking to realize economies of scale through aggressive facility expansion. It plans to expand battery production bases in the United States, Europe, and China and generate profits by maximizing production efficiency.
The company has mapped out a mid- to long-term plan, which calls for boosting its annual production capacity of pouch-type and cylindrical electric vehicle batteries to 200 GWh and 60 GWh, respectively, by 2023.
Pouch type batteries go into general electric vehicle models of Hyundai Motor, GM, and Volkswagen. If LG Energy Solutions produces batteries of 200 GWh per year, it can supply batteries to about 3.2 million electric vehicles. Cylindrical batteries are supplied to Tesla and Lucid Air. An Annual production capacity of 60 GWh can meet demand from 960,000 electric vehicles.
In order to realize its goal, LG Energy Solutions will additionally build 140 GWh production facilities for three years starting from 2021. The company’s battery plant in Poland, which is the world's largest battery production base, currently has an annual production capacity of 70 GWh. The company is ready to expand it at any time if demand increases.
LG Energy Solutions will more than double the production capacity of its two plants in Nanjing from 15 GWh to 30 GWh by 2023. The company is planning to triple the production volume of cylindrical batteries produced at its plants in Nanjing and Korea from the current 20 GWh to 60 GWh. In addition, the company plans to additionally secure 30 GWh electric vehicle battery production facilities through Ultium Cells, its joint venture with GM.
Meanwhile, LG Energy's solution is planning to push for an IPO in order to secure investment funds. Some predict that the listing will be possible as early as the second half of 2021. Stock analysts estimate the company’s value at above 50 trillion won. Some even suggest 100 trillion won. The investment banking (IB) industry expects LG Energy Solutions to secure more than 10 trillion won through the IPO.