LG Energy Solution signs battery module deal with Freudenberg e-Power Systems

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LG Energy Solution signs battery module deal with Freudenberg e-Power Systems

Published: 02 Feb. 2023, 16:38

Officials from LG Energy Solution and Freudenberg e-Power Systems take a photo after signing a battery module deal. [LG ENERGY SOLUTION]

LG Energy Solution signed a big battery module deal with Michigan-based Freudenberg e-Power Systems (FEPS) to target the electric commercial vehicle market.

Under the deal, the Korean battery maker will supply a total of 19 gigawatt-hour battery modules to FEPS starting next year, which is enough to make more than 50,000 high-performance electric commercial vehicles such as buses and trucks.

The size of the deal is estimated at about 4 trillion won ($3.3 billion), though the company did not confirm the exact amount.

FEPS will assemble the battery modules into packs and sell them to major commercial vehicle makers in North America.

FEPS, a subsidiary of Germany's Freudenberg Group, runs a gigafactory in Michigan. In 2018, it acquired a majority stake in Xalt Energy, a pouch-type battery cell manufacturer.

Cells, modules and packs are units of gathered batteries. A cluster of cells makes up a module and a cluster of modules make up a pack, a form of battery installed to power an EV. Making modules requires technologies to protect the cells from the external environment such as heat or vibration.

The commercial EV battery market is comparably smaller than the passenger EV market. The prices of batteries are normally 50 percent higher than those needed for passenger EVs.

The world's electric commercial vehicle market, which was about 37 gigawatt-hour in 2022, is expected to increase at an annual rate of 40 percent to reach up to 574 gigawatt-hour in 2030, according to data from SNE Research.

"The partnership with FEPS is a signal for us to preoccupy the high-potential electric commercial vehicle market," said Kim Dong-myung, head of the advanced automotive battery division at LG Energy Solution.

"We endeavor to maximize the customer value by using our acquired capabilities in all parts of batteries, from battery cells to packs."

BY SARAH CHEA [chea.sarah@joongang.co.kr]