LG Energy Solution investing 4 trillion won in battery capacity

Industry

Published: 19 Dec. 2022, 17:57 Updated: 19 Dec. 2022, 17:59

LG Energy Solution investing 4 trillion won in battery capacity

An engineer at LG Energy Solution's plant in Ochang, North Chungcheong holds cylindrical batteries. [LG ENERGY SOLUTION]

LG Energy Solution will invest 4 trillion won ($3.1 billion) by the end of 2026 to expand capacity at its battery plant in Ochang, North Chungcheong, upping its bet on cylindrical-type EV batteries.

The 4-trillion-won funding includes the 730-billion-won investment announced in June and will be used in ramping up production capacity for next-generation cylindrical batteries at the Ochang plant, the battery maker said Monday.

The battery maker declined to specify the plant's future capacity and did not disclose the exact types of batteries that will be produced.

According to local press reports, the main product will be 4680 batteries, a newer battery type with better energy efficiency than previous types. The 4680 indicates the size of the battery — 46 millimeters (1.8 inches) in diameter and 80 millimeters in length.

The June announcement indicated that the Ochang plant will add 9 gigawatt hours of 4680 cell annual capacity and 4 gigawatt hours of 2170 cell capacity.

The new production lines will feature an advanced factory operating system to maximize production capabilities. With the expansion, a total of 1,800 employees will be hired.

North Chungcheong Governor Kim Young-hwan pledged to expedite approvals and related processes for the proposal by establishing a dedicated team at the provincial government.

“We will run a team tasked with resolving a wide range of administrative issues throughout the entire process — from groundbreaking to operation,” Kim said in a statement released by LG Energy Solution.

Complex layers of regulations from regional governments and the central government are often blamed for delaying the construction of manufacturing facilities.

With more global carmakers choosing cylindrical batteries for electric vehicles (EVs), LG Energy Solution has recently been seeking to expand its cylindrical battery production capacity. To date, its main product has been staple pouch-type batteries.

Cylindrical batteries are cheaper to produce than pouch or prismatic-type batteries. They have better temperature control, which reduces the risk of fire. Global carmakers, including Tesla and BMW, have chosen cylindrical batteries as the batteries for their future EVs.

In March, the company announced a 1.7-trillion-won investment in a new factory for cylindrical lithium-ion batteries in Arizona. The company also announced that month that it is building a factory in a joint venture with Stellantis in Canada.

LG Energy Solution and Stellantis will together invest 4.8 trillion won to build a pouch-type lithium-ion battery factory in Ontario.

BY SARAH CHEA, PARK EUN-JEE [chea.sarah@joongang.co.kr]