[5 Years of the Koo Kwang-mo Era] LG, Once a Mobile Phone Maker, Transforms into a Company Capable of Making Cars Too

LG Manufacturing All Major Electric Vehicle Components

"In the era of mobility foundries (contract manufacturing) mass-producing electric vehicles, there is no reason for a company that handles all the necessary parts business for making electric vehicles not to be able to make cars. In the case of LG, which can produce the core battery of electric vehicles, they may currently prefer to focus only on the parts business without making cars themselves, but if the Apple Car emerges and mobility foundries become widespread, the situation could change." - Kim Pil-su, Professor, Department of Future Automotive Studies, Daelim University

Automotive experts evaluate that if LG sets its mind to it, it can immediately produce world-class advanced electric vehicles directly. LG is a corporate group that produces all the major parts such as the battery, the heart of electric vehicles, the motor, the engine, and the display.

On the 29th, it marked the 5th anniversary of Koo Kwang-mo becoming the CEO of LG Corporation and leading the LG Group. Five years ago, LG's flagship products were mobile phones and home appliances. However, now when people think of LG, automotive parts come to mind. In particular, LG has created an ecosystem where you must do business with LG to produce electric vehicles, which are considered the future of automobiles.

The core battery of electric vehicles is made by LG Energy Solution. In December 2020, during Koo's second year as CEO, LG Chem's battery division was spun off to establish the secondary battery company LG Energy Solution, which recorded annual sales of 25 trillion KRW and operating profit of 1 trillion KRW last year, achieving its highest annual performance. This year, it is also on track to expand annual sales by more than 25%. The order backlog in the battery sector reached 385 trillion KRW as of the end of last year.

LG Energy Solution has designated the North American market, expected to grow over 60% this year, as a key strategic region. Currently, it operates a standalone plant in Michigan and the first plant of the GM joint venture (JV) in North America, and is constructing the second and third plants of the GM JV. In addition, it is expanding battery production plants in cooperation with major automakers such as Stellantis and Honda. If investments proceed as planned, LG Energy Solution's production capacity in North America is expected to increase to 250-260 GWh by 2025, making it the largest in the world.

The growth in the automotive electronic components sector is also steep. The order backlog for automotive electronics this year for LG's 'big three' electronics affiliates?LG Electronics, LG Display, and LG Innotek?is expected to exceed 120 trillion KRW.

Within LG Electronics, the VS Business Division, responsible for automotive components, posted operating profit for the first time last year. LG Electronics is fostering the automotive components business by leading a triangular alliance consisting of the VS Business Division's vehicle infotainment systems, subsidiary ZKW's vehicle lighting systems, and the electric vehicle powertrain of the joint venture LG Magna e-Powertrain. Recently, it has also entered the charger business. In the organizational restructuring last November, LG Electronics established an EV charging business division and acquired a 60% stake in HiBee Charger, a specialized electric vehicle charger company. Last month, it introduced four types of chargers?7kW (slow), 100kW (fast), and 200kW (fast)?that can be safely and conveniently installed at homes, offices, and various commercial facilities.

LG Display, which used to produce TV panels, now also manufactures vehicle panels. It produces vehicle displays using flexible OLEDs based on polyimide (PI) substrates. Despite operating at a loss in the first quarter of this year, orders for vehicle panels exceeded 3 trillion KRW, growing 20% compared to the end of last year. It expects to double in size within the next three years. Last year, it also developed invisible vehicle speakers using film-type exciters (vibration generating devices).

LG Innotek is responsible for vehicle motors, sensors, communication, and camera modules, which are growing markets ahead of the autonomous vehicle era. Representative products include advanced camera modules essential for recognizing driving situations, LiDAR modules that scan the vehicle's surroundings with 360-degree omnidirectional detection, and sensor products such as radar that detect the direction, speed, and distance of objects inside and outside the vehicle.

In the automotive industry, even if LG does not immediately mobilize its affiliates to enter vehicle production, it is believed that with just the platform?the skeleton of electric vehicles?it could produce electric vehicles like washing machines or refrigerators right away. Professor Kim said, "If the electric vehicle market grows further and Apple Car, Google Car, Amazon Car, and others appear one after another, ushering in the full-fledged era of mobility foundries, LG will no longer be able to remain idle (in vehicle production). If the platform is perfected, they can produce very high-quality cars."

Even if LG does not immediately produce electric vehicles, the launch of the Apple Car could further expand collaboration in electric vehicle production. Dongwon Kim, a researcher at KB Securities, explained, "Assuming the Apple Car launches in 2026, considering the automotive electronics business structure of LG Group's three electronics affiliates, the possibility of collaboration is open. LG Group has a full lineup of core electric vehicle parts, so it can produce and supply products."