LG New Energy: will defeat the Ningde era

According to the Korea Herald, South Korean battery maker LG Energy Solution (LGES) said that in the global competition for the electric vehicle battery market, it will soon beat Chinese rival Cathe times.

According to the report, LG New Energy CEO Kwon Young-soo said at an online media conference that LGES's share will surpass that of CATL because its customer base is wider, while CATL only operates factories in China. "We receive more orders, so we will surpass our competitors, and the market value gap between us and the NINGD era will also narrow." Of course, I see the opportunity", and the "competitor" mentioned here also refers to the Ningde era.

Image source: LG New Energy

LGES will hold an initial public offering on January 27, issuing 34 million new shares at a price of between 257,000 and 300,000 won ($2,183,380 to $254.92) per share, and is expected to raise up to 12 trillion won with a market capitalization of about 70 trillion won. For now, the market value of the CATL era is about 236 trillion won.

The company said it would use the funds to build more factories overseas, expand investment in research and development, and raise battery standards. Analysts said the IPO could make LGES the third most valuable company in South Korea, behind Samsung Electronics and SK Hynix.

Kwon stressed that the difference between LGES and CATL is "quality battery". According to the data released by SNE Research, a South Korean market research institute, in the first eleven months of 2021, CATL led with nearly one-third of the market share, while the share of LGES was 20.5%, and there was still a big gap.

LGES's customers include General Motors and Tesla, and it operates factories in the United States, Poland, China and Indonesia. In addition, LGES plans to build two new plants in Ohio and Tennessee by 2025 in a joint venture with GM.

Kwon said, "Other than that, we don't currently have any plans to expand the plant, but a joint venture is always an option. However, all the factories in Poland will be owned by us. Kwon also noted that factories need to be close to automakers. LGES plans to build a "smart factory" with AI technology, as overseas factories require skilled managers and can share skills through the latest technology. "We call it data-driven decision-making. We believe it will reshape the way we produce batteries. ”

While some automakers are now trying to produce their own batteries, Kwan believes "they won't threaten us" and calls supply chain issues and patents an obstacle. "It's a challenge to maintain a steady supply while using battery technology without having to pay high royalties."

In addition, Kwon is not worried about the supply bottleneck caused by the new crown epidemic, because LGES has locked in key materials.