LGES to build pouch-type long-cell battery mother factory at $449 mn

LG Energy Solution Ltd. will add a new mother factory to its Ochang manufacturing complex, as part of its plan to turn the home manufacturing site into a global technology research & development hub for new battery technologies amid growing demand for different forms of electric vehicle batteries.

The South Korean EV battery leader announced on Tuesday a plan to invest 600 billion won ($449 million) to build a mother factory for pouch-type long-cell batteries at Ochang Energy Plant 2, its second battery manufacturing facility in Cheongju, North Chungcheong Province.  

The new line, the construction of which is slated to be completed in December 2024, will test produce the pouch-type long-cell batteries and assess the battery’s mass-production feasibility before transferring the battery technology and production processes to the company’s other battery plants across the globe.

A mother line enables not only the trial production of new technologies and production processes but also their mass-production verification. It is different from a pilot line, in which only the trial production of next-generation technologies is available.

The company expects the new mother line will enable it to meet various demands from its customers more effectively and significantly shorten the period to improve production yields for new battery technologies, it said in a news release.

OCHANG ENERGY PLANT AS NEXT-GEN BATTERY TECHNOLOGY CENTER

LG Energy Solution has made the latest investment decision to meet its customers’ growing demand for next-generation battery technologies in line with the burgeoning global EV market.

The pouch-type long-cell battery is one of these new EV battery types actively sought after by global EV makers.

LG Energy Solution has been building an additional mother factory at Ochang Energy Plant for cylindrical batteries, another promising EV battery technology, since June last year at a cost of 580 billion won.

The Korean battery maker is testing its next-generation battery technologies at its main battery manufacturing facilities in Cheongju, which serve as the mother factory for its plants across the world from North America to Europe to Asia.

The latest investment is part of the company’s big plan to nurture its Ochang Energy Plant and Ochang Energy Plant 2 into its global battery technology R&D and manufacturing hub with an investment of 4 trillion won until 2026 as it becomes more important to be equipped with capabilities to mass produce the best-quality batteries to deliver them at the right time amid surging EV battery demand, according to the company.

“As the control tower, where new technologies are first tested and applied, Ochang Energy Plant lies at the heart of LG Energy Solution,” said Kwon Young-soo, chief executive officer of LG Energy Solution.

The Korean battery leader, also the world’s second-largest battery maker, runs battery manufacturing facilities in various countries, and it is especially more aggressive in ramping up EV battery production output in North America to enjoy tax break benefits from the US government under the Inflation Reduction Act (IRA).

In March, it announced a 7.2 trillion won investment to build a battery complex in Queen Creek, Arizona to churn out cylindrical batteries used in EVs and lithium-ion phosphate (LFP) pouch-type batteries used in energy storage systems. It marked LG Energy Solution’s single largest investment in constructing its own battery manufacturing facility in the US.

In addition to another standalone battery plant in Holland, Michigan, it also runs a battery joint venture, Ultium Cells LCC, with its US partner General Motors Co.

LG Energy Solution announced early this month that its preliminary operating profit for the first three months of this year is expected to more than double to 633.2 billion won from the same period of last year on strong EV demand worldwide, as well as IRA tax benefits. Its detailed earnings are due to be out this week.

Write to Sung-Soo Bae at baebae@hankyung.com

Sookyung Seo edited this article.