LG Chem secures monopoly on battery supplies for US electric vehicle startup

SEOUL, Mar 1, 2020, Hankyoreh. LG Chem has secured a monopoly on battery supplies for the first mass-produced car by a US electric vehicle startup. Lucid Motors, the company that has joined forces with LG Chem, is a luxury electric vehicle producer targeting consumers of Tesla, the leading high-end electric vehicle manufacturer. Mass production is scheduled to begin in the second half of 2020 for its standard Lucid Air model, Hankyoreh reported.

On Feb. 25, LG Chem announced that it would be exclusively supplying next-generation cylindrical cells for the Lucid Air standard model between the second half of 2020 and 2023. It did not announce the volume or dollar value of the supplies. In addition to LG Chem, Lucid Motors previously established a strategic partnership (MOU) for battery supplies with Samsung SDI in 2016.
Lucid Motors’ Lucid Air is a luxury sedan with similar features to Tesla’s Model S, including acceleration from 0 to 100km/h in 2.5 seconds and a traveling distance of 643km when fully charged. Like Tesla vehicles, it uses cylindrical cells.

LG Chem, which has previously focused its production on pouch cells, has also been actively expanding its cylindrical electric vehicle battery projects, securing battery supply contracts with Lucid Motors and Tesla last year. The 21700 (21mm in diameter and 70mm in height) batteries that LG Chem will be supplying to Lucid Motors have called the “next generation of cylindrical cells,” with a roughly 50% higher capacity that previous 18650 electric vehicle batteries (128mm in diameter and 65mm in height) and improved performance, the company explained. After establishing its cylindrical cell mass production system in 1998, LG Chem has been marketing cylindrical cells for notebooks since 2001.

Among South Korea’s electric vehicle battery producers, LG Chem and SK Innovation have chiefly produced pouch cells, while Samsung SDI has focused on prismatic cells. But amid an insistence on cylindrical cells by industry leader Tesla and light electric vehicles (LEVs) such as electric bicycles and scooters (which use light cylindrical cells), both LG Chem and Samsung SDI established new cylindrical cell production lines last year.

SNE Research, an organization specializing in electric vehicle and battery market research, predicted the cylindrical electric vehicle battery market would grow by an average of 25% annually through 2025. In a 2019 performance announcement early this year, LG Chem said it would be “focusing new investment on electric vehicles and LEVs using cylindrical cells, where are expected to show strong growth.”

Kim Jong-hyeon, head of LG Chem’s battery division, said, “With our cylindrical cell supplies to Lucid Motors, we have strengthened our electric vehicle battery portfolio.”

He also said the company plans to “make aggressive inroads on the fast-growing electric vehicle cylindrical battery market to become a top global player in the industry.”

By Kim Eun-hyoung