Korea’s LG Chem is now the world’s largest EV battery supplier, having just inked a deal with Daimler to provide batteries for the upcoming Smart ForTwo Electric Drive, which is scheduled for production in 2016. LG Chem also supplies batteries to Volkswagen, Ford, Hyundai, Renault, Audi, Chevrolet, Kia and GM. In all, LG Chem supplies 13 of the world’s top 20 brands.
In a press release accompanying the signing of the new contract, Young Soo Kwon, the President of Energy Solution Company, LG Chem, said, “LG Chem’s battery business and technology have been world-widely acknowledged once again as our products are continuously being installed by major automobile makers from their commodity brands to premium vehicles. LG Chem will continue to lead the EV battery market with differentiated technology to make us stand up as global No.1 battery manufacturer.” The new deal with Daimler supposedly makes LG Chem the largest battery supplier in the world, though I wonder what Panasonic reps might say to that.
Daimler hosted a Supplier Day in Stuttgart in February. LG Chem was the only battery maker invited, which gave its representatives an opportunity to talk shop with other Daimler suppliers from around the world. It will manufacture the battery cells and ship them to Daimler, which will assemble them into battery packs and install them into vehicles.
LG Chem has had a mixed history in the US. It built a factory in Holland, Michigan, 30 miles from Detroit with the help of $300,000,000 of federal incentives and tax breaks. Initially, the factory was supposed to provide batteries for the Chevy Volt, which went on sale in December of 2010 but production didn’t begin until 2013. Batteries from the Holland factory are scheduled to be part of the redesigned 2016 Volt, which should be in showrooms later this year.
A recent report by B3 Solutions suggests that the market for lithium ion vehicle batteries will grow to more than $18,000,000 a year by 2020. That’s the primary reason why Tesla and Panasonic are investing heavily in the Gigafactory in Nevada, so they can cash in on that burgeoning market. LG Chem is currently the biggest lithium ion manufacturer, but can they hold on to that lead? There are lots of other companies snapping at their heels.