South Korean battery giant LG Energy Solution (LGES) is betting big on prismatic battery cell production as the market starts to shift toward this innovative technology.
LGES shifts focus to prismatic batteries for future growth
LGES has established a task force to oversee its prismatic battery cell development, according to S&P Global AutoTechInsight.
The South Korean company is also already in talks with potential customers about its upcoming prismatic battery products, signifying a major pivot in its strategic focus.
Impressively, the move will make LGES the first-ever global battery maker to offer all three formats: prismatic, cylindrical, and pouch-type.
Intensifying race in prismatic battery tech
LGES and other South Korean battery makers have reportedly witnessed the growing popularity of prismatic battery cells for electric vehicles.
It prompted fellow South Korean players, including Samsung SDI and SK ON, to explore prismatic battery cell development. The latter has already designed its prismatic form factor technology, with ongoing preparation for mass production.
“The technology development for the prismatic form factor has been completed, and we are in detailed discussions with multiple clients regarding the timing of mass production.”
Kim Kyung-hoon, Chief Financial Officer of SK On, stated in a Q2 earnings conference call
In hindsight, LGES initially developed prismatic batteries in the 1990s and mass-produced them for small devices until the late 2010s. However, prismatic cells for EVs will likely be way larger than early models used in smaller gadgets.
On the other hand, Samsung SDI has been the only local supplier of prismatic cells in the country for some time already. Therefore, it may have a competitive advantage against SK On and LGES in this field.
“Prismatic batteries will gradually widen its portion in the global EV market, as is shown by growing request for collaboration from EV manufacturers.”
Samsung SDI Executive Vice President Michael Son
Prismatic batteries’ growing popularity
Prismatic batteries accounted for 19% of the battery market in Europe in 2019, according to SNE Research.
Their market share dramatically increased to 49% as of 2023, outpacing previously leading battery formats such as pouch-type cells (35% share). For reference, pouch-type cells used to be the most popular option in Europe, with a 46% market share in 2019.
On the other hand, cylindrical batteries’ market share in Europe dropped from 35% in 2019 to 16% by 2023.
LGES contends that this major shift underscores the increasing preference of electric automakers for prismatic batteries over pouch and cylindrical batteries. The growing popularity of prismatic batteries is unsurprising, considering their incredible resistance to external shocks and high durability due to their aluminum can housing.
In addition, they also support simpler manufacturing processes and lower production costs, making them suitable for mass production.
