LG Energy Solution Negotiates with Chinese Suppliers for Cost-Effective EV Batteries in Europe
LG Energy Solution (LGES) is in discussions with three Chinese suppliers to produce affordable batteries for electric vehicles (EVs) aimed at the European market. This move comes as the European Union imposes additional tariffs on Chinese EV imports, increasing competition. LGES Director Wonjoon Suh confirmed the talks, highlighting the growing pressure on non-Chinese battery manufacturers to reduce costs to match cheaper Chinese rivals.
Recently, French automaker Renault announced plans to incorporate lithium iron phosphate (LFP) battery technology for mass-produced EVs, partnering with LGES and Chinese rival CATL to establish a European supply chain. Suh stated, “We are in talks with Chinese firms to develop and produce LFP cathodes for Europe,” though he did not disclose the companies involved. He added that potential joint ventures and long-term supply agreements are being considered to lower production costs to Chinese competitor levels within three years.
Cathodes, responsible for about a third of a battery cell’s cost, are crucial in EV battery production. China leads in global LFP cathode supply, with major producers including Hunan Yuneng New Energy Battery Material, Shenzhen Dynanonic, and Hubei Wanrun New Energy Technology.
Currently, EV batteries primarily use nickel-based or LFP cathodes. Nickel-based cathodes, used by Tesla, store more energy but are more expensive. LFP cathodes, favored by Chinese automakers like BYD, are safer and cheaper due to more abundant materials.
LGES is considering Morocco, Finland, and Indonesia as potential sites for LFP cathode production in partnership with Chinese firms for the European market. Suh noted significant demand for affordable EVs in Europe, comprising half of the region’s EV sales, higher than in the US.
According to SNE Research, in the first five months of this year, South Korean battery producers LGES, Samsung SDI, and SK On controlled 50.5% of the European EV battery market, with LGES holding a 31.2% share. Chinese battery manufacturers held 47.1% of the market, led by CATL with a 34.5% share.
Source: Economica.net
