SEOUL, Dec 7 (Reuters) - South Korean battery maker LG
Energy Solution (LGES) is set for a record-breaking initial
public offering (IPO) in Seoul to secure the funds aimed at
capturing booming global demand for EV batteries.
The company is expected to raise up to 12.8 trillion won
($10.87 billion) at a January listing, which could take the
company's value to 70.2 trillion won and make it South Korea's
third most valuable after Samsung Electronics Co Ltd
and SK Hynix Inc.
Below is some of the history of LGES and its expansion plans
in key markets.
LGES, wholly owned by LG Chem Ltd before the
spin-off last year, commands more than 20% of the global
electric vehicle (EV) battery market and supplies to Tesla Inc
, General Motors Co and Volkswagen
In 1992, LG embarked on lithium-ion battery research, a
distant latecomer to the market led by Japanese firms such as
Panasonic and Sony. Although it managed to mass produce
lithium-ion batteries in 1998, it was still a decade behind
Japanese makers. A breakthrough came with the deal to supply
batteries for GM's Volt in the late 2000s, one of the world's
first mass-produced passenger EVs.
LGES leads cross-town competition SK On and Samsung SDI
with production capacity expected to reach 155
giga-watt hours (GWh) of batteries by the end of this year and
plans to raise that to 430 GWh in 2025, enough to power about
7.2 million EVs.
SK On, a wholly owned subsidiary of SK Innovation
, supplies to Ford Motor Co and Kia Corp
among others, has combined global annual production
capacity of 40 GWh and plans to increase output to 220 GWh by
LGES' bigger Chinese rival Contemporary Amperex Technology
Co Ltd (CATL) had an annual battery production
capacity of 65.45 GWh as of end-June and an additional 92.5 GWh
capacity under construction.
LGES, which has battery production sites in the United
States, China, South Korea, Poland and Indonesia, has earmarked
more than $4.5 billion for new U.S. battery production business
That includes two new plants, jointly built with GM in Ohio
and Tennessee, to manufacture 70 GWh of batteries in the United
States by 2024.
In China, where it makes cylindrical battery cells for
Tesla, LGES has invested about 5.7 trillion won and plans to
invest another 1.2 trillion won.
It has invested about 6.8 trillion won in Poland to secure
an annual production capacity of 70 GWh and plans to invest
another 2.5 trillion won.
In July, LGES and Hyundai Motor Group announced a $1.1
billion plan to jointly build an EV battery cell plant in
In October, LGES struck a preliminary joint venture
agreement with Stellantis NV to produce EV battery
cells and modules for North America.
Rival SK On is giving chase with a planned 5.1 trillion won
investment in the United States to be matched by Ford to build
three EV battery plants https://www.reuters.com/business/autos-transportation/ford-sk-invest-114-bln-add-electric-f-150-plant-three-battery-factories-2021-09-27.
LGES' IPO plans had been delayed by setbacks over risks of
its lithium-ion batteries catching fire, resulting in Hyundai
Motor's $900 million recall https://www.reuters.com/business/autos-transportation/hyundai-motor-replace-battery-systems-900-mln-electric-car-recall-2021-02-24
involving the Kona EV and GM's $2 billion Bolt EV recall https://www.reuters.com/business/lg-units-say-results-accounted-918-mln-costs-gms-bolt-recall-2021-10-12.
Analysts estimate LG will bear about 70% of Kona EV recall
costs. Automakers do not provide breakdowns of recall costs.
In October, GM said LG Chem and LG Electronics Inc
had agreed to reimburse the U.S. automaker but did
not say how much LG would pay.
Analysts have said battery-related fires are relatively rare
but are expected to rise because of more battery-powered cars on
the road. They have highlighted efforts to minimise https://www.reuters.com/business/autos-transportation/are-lithium-ion-batteries-evs-fire-hazard-2021-08-23risks
such as using different battery chemistries to make battery
cells more stable and cost effective.
($1 = 1,177.6700 won)
(Reporting by Heekyong Yang; Editing by Jack Kim and Lincoln