To Meet Growing Demand

Cylindrical batteries from LG Energy Solution

LG Energy Solution will expand cylindrical battery production in Korea and China.

According to a securities report submitted by LG Energy Solution for the planned IPO, the company will invest 645 billion won in its Ochang plant in Korea by 2023 to add a cylindrical battery production line. The plant’s production capacity will expand to a total of 22GWh by 2025, including cylindrical batteries.

In addition, LG Energy Solution plans to invest 1.2 trillion won in its Nanjing plant in China by 2024 to increase its cylindrical battery production capacity to more than 60GWh in 2025.

Considering that it usually costs around 70 billion won to expand battery production capacity by 1GWh, LG Energy Solution is expected to expand the cylindrical battery production capacity of the Ochang and Nanjing plants by about 9GWh and 17GWh, respectively.

The company's move is intended to respond to the expected growth in demand for cylindrical batteries.

Cylindrical batteries are standardized like small ordinary batteries for everyday use. Thus, they have the advantage of low production costs and high energy density per volume. This fact explains why Tesla and other startups are interested in cylindrical batteries.

LG Energy Solution is known to supply cylindrical batteries to Tesla’s Chinese Model 3 and Model Y. As sales of Tesla’s electric vehicles keeps growing, LG Energy Solution has been pushing for facility expansion. Earlier, the company corrected its production capacity as of the end of 2020 from 100GWh to 120GWh, saying that 20GWh of cylindrical batteries was added.

Not only Tesla but also electric vehicle startups and carmakers such as Rivian and Lucid are adopting cylindrical batteries. Considering Bloomberg NEF’s forecast that electric vehicle sales will reach 25.8 million units in 2030, 15 times the level of 2020, demand for cylindrical batteries is also expected to increase.

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