Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: All or nothing: Why circular business models require a holistic approach
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Focus on Electrification
July 27, 2022 06:04 AM

Tesla supplier LGES plans EV battery plant in Europe

South Korea's LGES plans an EV battery plant in Europe.

Reuters
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    LGES logo
    REUTERS

    SEOUL -- Tesla supplier LG Energy Solution said it is looking at sites in Europe for a new battery plant and would ramp up production in Asia outside of China, where COVID-19 lockdowns and rising costs were weighing on profits.

    The South Korean company, which supplies electric vehicle batteries to automakers including General Motors, Ford and Volkswagen Group, said it was responding to increased demand in Europe for cylindrical batteries - the type used by Lucid and Tesla.

    The company did not say how much it planned to invest in the new European plant or give a timeframe for construction.

    LGES added that it would use its Asia production sites outside of South Korea and China, such as its battery joint venture with Hyundai in Indonesia, to better respond to customer demand.

    "With the easing chip shortage and auto customers' plans to launch new models as well as solid EV demand among customers, we expect solid demand for pouch and cylindrical EV batteries in the second half of this year," Chief Financial Officer Lee Chang Sil said in a post-earnings conference call.

    Analysts are divided on the near-term outlook for EV demand as inflation and interest rates surge, while snarled supply chains and China's COVID-19 containment measures disrupt production.

    Still, some analysts said it would take another year for premium EV sales to slow and have an impact on battery sales because supplies were tight due to pent-up demand.

    LGES said it aims to expand joint ventures for pouch and cylindrical batteries for strategic customers and EV startups in North America.

    The supplier said it was reviewing a 1.7 trillion won ($1.29 billion) investment in a cylindrical cell plant in Arizona and would issue a statement on the matter in three months.

    There was no change in customer demand, but extreme inflation plus rising logistics and building costs prompted it in June to delay construction. It had said in March it would begin production in the second quarter.

    LGES said it plans to start selling lithium iron phosphate (LFP) batteries manufactured in its China plant in 2023 and add a new LFP battery production line at its factory in Michigan in 2024 to meet demand in North America.

    Better second half

    LGES raised its revenue outlook for the full year to 22 trillion won from 19.2 trillion won, and above the 20.9 trillion won average of 30 analyst estimates compiled by Refinitiv.

    For April-June, revenue fell 1.2 percent from the same period a year earlier to 5.1 trillion won.

    Sales to Tesla suffered during the quarter as the U.S. automaker paused production at its Shanghai factory in March and April due to COVID lockdowns.

    Analysts expect profitability to recover in the second half of the year as LGES renegotiates terms with customers and passes on higher raw material costs.

    Operating profit dropped to 196 billion won for April-June from 724 billion won a year earlier, when LGES booked a one-time gain from a settlement with domestic rival SK On.

    The result compared with the 199 billion won average of 21 analyst estimates according to Refinitiv SmartEstimate.

    RECOMMENDED FOR YOU
    Leoni finds 'white knight' savior in Austrian entrepreneur
    Recommended for You
    Leoni sign
    Leoni finds 'white knight' savior in Austrian entrepreneur
    Faurecia logo
    Faurecia opens $147M plant in Mexico
    Magna Steyr Rtrs web.jpg
    EV tax rules lift Magna Steyr's hopes for U.S. production
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us