LG and SK End Lawsuit in US, Counterattack with Battery Business

LG Energy Solution, GM Joint Venture
SK Innovation, Ford Joint Venture
Expanding New Facilities in the U.S.

[Asia Economy Reporter Choi Dae-yeol] The maker that sold the most electric vehicles (EVs) in the United States this year is Tesla, led by models such as the Model 3 and Model Y. What stands out is Tesla's market share. According to Cox Automotive and others, Tesla captured about 83% of the U.S. EV market last year, but this year it has slightly decreased to 71%. Changes have also been detected in the best-selling models. Last year, four of the top five models were Teslas.

On the other hand, this year, non-Tesla models such as the Chevrolet Bolt EV, Ford Mustang Mach-E, and Audi e-tron have entered the top ranks. Ford's pickup truck F-150 Lightning (electric model), scheduled for delivery next year, received 20,000 reservations within half a day. As the U.S. EV market, once led by Tesla, expands to various brands, it is expected that the market share of our battery companies will rapidly increase.

According to the industry on the 21st, our companies' global EV battery market share competes with Chinese companies for the lead, but the situation is different when looking only at the U.S. market. Based on locally manufactured batteries, they trail behind Japan's Panasonic, and based on imported volumes, they are less than half of China's level.

However, the situation is likely to change going forward. Batteries produced at SK Innovation's Georgia plant, completed earlier this year, will enter mass production within the year, and batteries from the joint plant between LG Energy Solution and General Motors (GM) will also be installed in new cars after next year. Samsung SDI is also considering establishing a battery cell factory in the U.S.

SK Innovation's U.S. battery business unit, SK Battery America, is building its Plant 1 (right in the photo) and Plant 2 in Georgia. Photo by SK Innovation

In particular, LG Energy Solution and SK Innovation have led new facility expansions in the U.S. this year. On the 20th (local time), Ford and SK Innovation agreed to establish a joint venture, BlueOvalSK, within the year. They plan to build two new factories as soon as possible to produce batteries on an annual scale of 60 GWh. Considering that mass production is scheduled for the mid-2020s, construction is expected to begin within two years at the latest. SK Innovation has already confirmed two factories in Commerce, Georgia, and is considering building two additional ones.

LG Energy Solution has also confirmed two joint factories with General Motors (GM). The Rose Town plant in Ohio is expected to complete construction next year, and the Spring Hill plant in Tennessee in the southern region decided on scale and investment timing in March. Separately, they plan to shortlist candidate sites for two to three independently operated factories in the first half of this year. By 2025, four years from now, the U.S. EV market is expected to grow about eightfold to approximately 2.4 million units. At that time, LG Energy Solution's battery production capacity in the U.S. is estimated to increase to 145 GWh, and SK Innovation's to about 105 GWh.

GM and Ford, the first and second largest automakers in the U.S., are moving quickly by establishing joint ventures with battery companies and making joint investments to outpace companies leading in the EV field such as Tesla and Volkswagen. This is because EV batteries are difficult to develop in a short period, and supply is expected to fall short compared to demand for several years ahead, making supply and demand a critical issue. The Biden administration and local state governments are actively offering incentives such as subsidies for purchases, charging infrastructure, and tax benefits to promote EV adoption and attract local investment. Korean battery companies are also responding proactively.

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