South Korea’s LG Energy Solution Ltd (LGES), a supplier of Tesla, said it is seeking battery production sites in Europe and Asia outside China, where the COVID-19 lockdowns and rising input costs have left their quarterly profit below the estimates of the market.
LGES, which supplies electric vehicle (EV) batteries to automobile companies including Ford Motor Co, General Motors, and Volkswagen AG, said it is responding to the increased demand in Europe for cylindrical batteries, and the type has been used by Tesla Inc., and Lucid.
Lee Chang Sil, chief financial officer at LGES, said that with the easing chip shortage and plans of automobile customers to launch new car models as well as solid electric vehicle demand among customers, they are expecting solid demand for cylindrical and pouch electric vehicle batteries in the second half of 2022.
The analysts are divided on what electric vehicle demand will look like as inflation and interest rates rise, while disrupting the supply chains and COVID-19 restriction measures in China are also affecting the production.
The company said it is aiming to expand joint ventures for cylindrical and pouch batteries for strategic customers and electric vehicle start-ups in the North American region. LGES said it is planning to start selling lithium iron phosphate (LFP) batteries produced in its China plant in 2023.
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