South Korean electric vehicle battery giant is counting on accelerated US expansion to match and surpass its biggest Chinese rival CATL. LG Energy Solution has been working on US-related projects as it aims to obtain the country’s federal tax credits under the Inflation Reduction Act.
For those unaware, the IRA entices local and foreign companies with subsidies worth billions of dollars to build EVs domestically without using Chinese materials and components.
In return, North America will be acknowledged as the fastest-growing EV battery market in the world. It will also reduce the country’s reliance on imports of critical minerals and components, particularly from China.
LGES expands footprint in the US
LGES has previously announced plans to form a joint venture with Japanese automaker Honda to develop a new battery production plant worth $4.4 billion overall.
Today, the new joint venture held its ground-breaking ceremony in Fayette County, Ohio. The JV will build pouch-type li-ion batteries for Honda’s upcoming EV models. Furthermore, the companies expect the facility to hit a production rate of 40 GWh annually once completely functional.
Apart from that, LGES has also formed JVs with other automakers, including General Motors and Stellantis. The companies aim to manufacture EV batteries in the US and Canada to take advantage of the federal tax credits under the IRA.
Furthermore, previous reports suggested that LGES is currently in “active discussion” with Tesla for the supply of cylindrical batteries to the proposed Arizona production plant.
Considering these major projects and investments, the South Korean battery company forecasts to hit a 65%-70% growth in the US battery market. Notably, that figure is significantly higher than LGES’ target of 45% in Europe and 25% in China.
Chinese companies led the global EV battery market in 2022
No doubt, Chinese EV makers dominated the global market last year, per SNE Research. Of the top 10, 6 spots were claimed by Chinese companies, with CATL as the market leader.
Meanwhile, LGES, with a 13.6% market share, landed second, trailing far behind CATL’s 37%. Notably, Chinese automaker BYD is also closely competing with the South Korean automaker, with a similar market share of 13.6% last year.
Below are the top 10 EV battery makers in 2022:
| Companies | 2022 Growth | 2022 Market Share |
| CATL | 92.5% | 37.0% |
| LG ENERGY SOLUTION | 18.5% | 13.6% |
| BYD | 167.1% | 13.6% |
| PANASONIC | 4.6% | 7.3% |
| SK ON | 61.1% | 5.4% |
| SAMSUNG SDI | 68.5% | 4.7% |
| CALB | 151.6% | 3.9% |
| GOTION HIGH-TECH | 112.2% | 2.7% |
| SUNWODA | 253.2% | 1.8% |
| FARASIS ENERGY | 215.1% | 1.4% |
| OTHERS | 55.9% | 8.6% |
| TOTAL | 71.8% | 100% |
That said, LGES is now looking to beat CATL, which it believes to just benefitted from the rapidly growing EV market in China. It further claims that its nickel-rich EV batteries and its global partnerships will aid the company in surpassing its Chinese rivals in the long run.
“The market in China expanded earlier than other markets of the world, and the Chinese market is not open to all competitors to compete, so we were really not allowed to compete in that market in a very open way.
Our aspiration is clearly to be number one globally in the long run.”
LGES Head Robert Lee
