LG New Energy "keeps an eye on" the Ningde era

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Recently, LG New Energy's initial public offering (IPO) has accumulated 114 trillion won and 4.424 million subscribers, both of which have set a record for South Korea. The company will be officially listed on January 27, and its total market value will reach 70.2 trillion won according to the standard of public offering share price, second only to Samsung Electronics and SK Hynix.

With this shareholder wind, LG New Energy CEO Quan Yingshou said confidently, "It is expected to surpass the NINGDE era in global market share and become the world's first." At the time of listing, the giants in the industry shouted, somewhat "painting cake" ingredients, but LG new energy's own strength should not be underestimated. In recent years, it has successively surpassed BYD, Panasonic and many other hard players, and its market share is close to the Ningde era. LG New Energy has also been smooth sailing in overseas markets, taking orders from Tesla, Volkswagen, General Motors and other major manufacturers. The orders held in hand and the wide customer base are the strength of LG New Energy.

The IPO will further accelerate LG New Energy's global expansion. In the prospectus, LG New Energy made it clear that in addition to the plan to develop new products and build smart factories to improve product quality, the rest of the fundraising is used for expansion. The company plans to invest 8.85 trillion won in its battery plants in South Korea, Poland, the United States and China by 2025, nearly doubling its production capacity to 400 gigawatt hours (GWh).

However, it is not easy for LG New Energy to "climb to the top". All along, with the efficient integration of new energy vehicles in the supply chain, as well as the advantages of China's huge consumer market, the Ningde era firmly occupies the number one seat in the global power battery. In the past year, thanks to the growth of global demand, CATL has achieved rapid expansion, and its global market share in the first 11 months of 2021 has reached nearly one-third, further widening the gap with LG New Energy.

The development trend of the industry is also worth paying attention to. Relevant reports show that although power battery factories around the world are currently producing at full capacity, there is still a huge capacity gap in the industry. According to South Korean market research firm SNE Research, by 2023, the global demand for power batteries for electric vehicles will reach 406GWh, but the power battery production capacity is only 335GWh. This also means that there is still a lot of room for this market to be opened. In front of the huge cake, more and more players are accelerating their entry. Some traditional car companies, such as Volkswagen, Great Wall, Geely, etc., have also begun to make batteries and launched huge investment plans. It is foreseeable that the global power battery market will not be calm in 2022. With the listing of LG New Energy, a new round of competition in the battery industry is opening up. (Source of this article: Economic Daily Author: Sun Changyue)