According to Chinese media, the South Korean company LG Energy Solution will start producing LFP (lithium iron phosphate) batteries at its facility in Nanjing, China, in 2023.
At the end of 2020, LG Energy, one of the world’s top manufacturers of lithium ternary batteries, started researching and developing pouch-type LFP batteries. New LFP battery-based energy storage technologies have recently been shown by LG Energy in Germany.
LG Energy’s battery manufacturing at its Nanjing factory is anticipated to benefit from high production efficiency and simple access to suppliers of materials and equipment because China has the most comprehensive LFP batteries supply chain in the world.
Market analysts claim that LG Energy would initially concentrate on the LFP battery’s use in energy storage systems because this application requires less time for product certification than electric cars (EVs), which results in a quicker return on investment. Additionally, due to the ternary lithium batteries’ issue with spontaneous explosion, energy storage systems have started to switch from ternary lithium batteries to LFP ones.
LFP batteries’ market share in China’s EV industry increased from 30% to 50% in 2021, and demand for LFP batteries will continue to be high in 2022. Hyundai Motor and SsanfYong have purchased LFP batteries from Chinese vendors such as Contemporary Ampere Technology and BYD in addition to Chinese EV manufacturers.
In order to win LFP battery orders from multinational EV vendors, such as current manufacturers, LG Energy is anticipated to compete. To create LFP batteries specifically for the US market, LG Energy will apparently work with US-based automakers. This will give LG Energy an advantage over Chinese LFP battery companies, who have not yet entered the US market.
In addition to providing ternary lithium batteries for Tesla’s Gigafactory 3 in Shanghai, China, LG Energy has also established a joint venture to produce ternary lithium batteries there with China’s Geely Automobile.