LG Chem's 'Reflected Benefits' from 'Nikola' Expectations

[Asia Economy Reporter Park So-yeon] LG Chem has gained a windfall from the success of Nikola, a hydrogen and electric vehicle startup dubbed the 'second Tesla.'

This is because the traditional American automaker GM partnered with Nikola to supply LG Chem's 'Ultium' batteries.

According to industry sources on the 12th, LG Chem's batteries are expected to be installed in Nikola's 'Badger' truck, scheduled for release in 2022.

Earlier, GM announced on the 8th that it had acquired an 11% stake in Nikola and would be responsible for the design and manufacturing of the Badger truck, as well as supplying Ultium batteries.

The Ultium battery is jointly developed by LG Chem and GM, incorporating LG Chem's NCMA (Nickel-Cobalt-Manganese-Aluminum) technology.

NCMA is a battery technology that reduces cobalt content and adds aluminum, with nickel expected to make up more than 90% and cobalt less than 5% of the composition.

Compared to conventional batteries, the expensive cobalt content is reduced, making the battery cheaper while improving efficiency and increasing driving range.

The joint battery plant of LG Chem and GM in Rose Town, Ohio, USA, which will produce these batteries, aims to be completed between 2022 and 2023.

GM and LG Chem launched a joint venture with a 50-50 stake at the end of last year to build a battery plant with a capacity of over 30 GWh (gigawatt-hours).

Subsequently, in March this year, GM announced plans to invest more than $20 billion (approximately 23.6 trillion KRW) in next-generation electric and autonomous vehicles, marking a full-scale pursuit of Tesla.

This strategic partnership with Nikola is also seen as GM's effort to expand its electric vehicle portfolio by leveraging Nikola's 'innovative image.'

For LG Chem, the joint venture with GM secures a stable supply channel while enabling the acquisition of additional customers.

According to SNE Research, as of the first half of this year, Tesla dominates over 70% of the U.S. electric vehicle market, and Panasonic still holds a dominant position in the U.S. battery market.

However, LG Chem has been gradually increasing its customer base, recently signing a battery supply contract with another emerging American electric vehicle company, Lucid Motors.

In addition, in the European market, LG Chem already holds strong leadership to the extent that it is said "3 out of 4 cars run on LG Chem batteries."

LG Chem ranked first with a 25.1% share in global electric vehicle battery usage for vehicles sold from January to July this year.

This content was produced with the assistance of AI translation services.