[The Editors' Verdict] Now We Can Tell the Hidden Story Behind Batteries

LG Energy Solution, whose main product is batteries for electric vehicles, is currently the brightest company in Korea. Its operating profit in the first quarter of this year reached a record high of 633.2 billion won, a 144% increase compared to last year. In terms of immediate earnings, it ranks around 5th or 6th among Korean companies, but in market capitalization, it competes with Samsung Electronics for first and second place. The stock price reflects the future value people see in the company. Many believe the company will shine even more in the future. It is no exaggeration to call it LG's jewel.

It was not a jewel from the beginning. Rather, it was once a pariah. These days, employees of LG Energy Solution often talk about those times. The atmosphere now is that it can be spoken of openly. "At the time, the head of the chemical division repeatedly told the late Chairman Koo Bon-moo that the business should be shut down," said an executive at LG Energy Solution. "In the end, the chairman said that battery business performance would be excluded from management evaluations," he added.

The CEO is also a salaried employee. They are evaluated every year and must generate more profit. The battery business was always running at a loss and held back the CEO of LG Chem. From the CEO's perspective, it was better not to pursue it. However, the owner's view was different. Even if it meant taking a loss immediately, it was considered essential for the future. Why did the CEO and the chairman have different views?

Listening to another person who now feels able to speak about it, we can speculate why this happened. Since the 1990s, Hyundai Motor Company had been thinking about electric vehicles. Initially, they tried to source the battery, the heart of the electric vehicle, from Japan's Panasonic. But that did not work out. They sought help from LG Group, which made small batteries for electronic devices. At that time, it was difficult to manufacture large batteries for automobiles given the technology level. Moreover, there was no demand.

"I told Chairman Koo Bon-moo and Chairman Choi Tae-won that we needed to produce large batteries for the future," said Lee Hyun-soon, former Vice Chairman of Doosan Group, who served as Hyundai Motor's Chief Technology Officer (CTO) for a long time. He worked as a researcher at GM in the U.S. before joining Hyundai in the 1980s, where he led independent engine development. Hyundai's hydrogen and electric vehicles were among the first on the road thanks to the foundation he laid as head of R&D.

At that time, Samsung SDI was the strongest player in the domestic battery industry. However, he did not approach Samsung. This is hard to understand now. Lee said, "Samsung was involved in the automobile business." He could not talk about it then, but now he can explain why.

Korean major companies compete but also cooperate simultaneously. Electric vehicles are the pinnacle of such cooperation. Semiconductors are supplied by Samsung Electronics, SK Hynix, Telechips, and Nextchip. Displays come from Samsung Display and LG Display. Batteries, the heart of the vehicle, are made by LG, Samsung, and SK. Motors bear the LG Magna and PHC brands. Hyundai Motor said, "We haven't calculated the localization rate of parts, but it should be about 99%." Except for some special automotive semiconductors, all parts are made by Korean companies. Recently, there have been talks that even those special semiconductors might be supplied by Samsung Electronics.

In the past, Korea's representative products often had key components that were foreign-made. Mobile phone communication chips were made by Qualcomm, and PC CPUs by Intel. Although these were Korean flagship products, it was somewhat awkward to call them domestic. Electric vehicles have a high possibility of becoming the first genuine Korean-made flagship product created by Korean companies. Owners and CEOs of major Korean companies gathered on the 14th to participate in the ‘Korea H2 Summit.’ The next step after electric vehicles is hydrogen vehicles. More precisely, our companies must join forces to create an ecosystem where hydrogen vehicles can operate. Hydrogen vehicles require a system for producing, distributing, and consuming hydrogen. No country has yet established a complete hydrogen ecosystem. The world is currently competing for hydrogen supremacy. To win this competition, more dialogue among companies is necessary. The government must also listen to the companies.

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