LG Energy Solution has reportedly secured a long-term agreement valued at around 10 trillion Korean won to supply 46 millimeter cylindrical batteries over a roughly ten-year period. While the company has not formally disclosed its customer, industry observers believe the cells are destined for BMW’s upcoming generation of pure electric vehicles.
In a conference call following its first-quarter earnings announcement, LG Energy Solution said it had booked more than 100 GWh of new orders for its 46 series cylindrical cells in the first quarter. The company already supplies this cell format to automakers including Mercedes-Benz in Germany, Rivian in the U.S., and Cherry Automobile in China. Although LG Energy Solution has previously provided batteries for BMW’s hybrid models, this would mark its first supply of cylindrical cells for the automaker’s fully electric vehicles.
Late last year, LG Energy Solution commenced mass production of the 46 series at its Ochang facility in North Chungcheong Province, South Korea. The company also plans to begin manufacturing the same cell format at its Arizona plant by the end of this year. With this latest order included, LG Energy Solution’s total order backlog is expected to exceed 400 GWh.
For the first quarter, LG Energy Solution reported sales of 6.555 trillion Korean won and an operating loss of 207.8 billion won. Year-over-year, sales declined by 2.5%, and the company swung to an operating loss. Management attributed the sales performance to softer electric vehicle demand in North America, partially offset by stable delivery of energy storage systems (ESS) and cylindrical batteries. The operating loss largely reflected start-up and stabilization expenses associated with new ESS production capacity in North America.
Chief Financial Officer Lee Chang-sil noted that ESS now represents a mid-20% share of group sales, up from under 10% last year. The company aims to grow that share to the mid-30% range by year-end.
Source: The Chosun Ilbo
