LG Energy Solution is engaged in talks with three China-based material suppliers to produce low-cost electric vehicle (EV) batteries for the European market.
LGES’ talks with Chinese material suppliers come after the EU Commission started imposing extra tariffs of up to 38% on imported EVs made in China.
“We are having talks with Chinese firms who will develop LFP cathode with us and produce them for Europe.
“We are considering various measures, including setting up joint ventures and signing long-term supply deals,” Wonjoon Suh.
Wonjoon Suh is the head of LGES’ advanced automotive battery division. He added that the South Korean company is considering three locations, Morocco, Finland, and Indonesia, to produce LFP Cathodes with Chinese material suppliers for the EU market.
LGES has been discussing LFP battery supply deals with multiple automakers in various regions, including the United States, Europe, and Asia. EV battery cathodes are usually nickel-based or use lithium iron phosphate (LFP). Nickel-based cathodes store more energy, resulting in longer EV ranges, but are costly. On the other hand, LFP cathodes hold less energy but are less expensive and more abundant in the environment.
Currently, many automakers are experiencing a slowing demand for electric vehicles due to high prices. There is a general consensus that buyers want more affordable electric vehicles. According to Reuters, Europe’s demand for affordable EV models exceeds the United States.
Due to slowing EV demand worldwide, LGES has decided to make some investment adjustments. Recently, LG Energy Solution and General Motors’ joint venture announced that it would slow construction on its third battery plant in the United States, in Michigan. Suh predicts that LGES might delay expansion plans for up to two years in the United States. In Europe, however, he forecasts that the demand for EVs will pick up in 18 months.
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