LG reinvesting at home in electric car batteries
The group's subsidiary, which is set to boost production at its Ochang plant, is second only to China’s CATL in this fast-growing sector of the global economy. US subsidies to electric cars made in North America are one obstacle.
Seoul (AsiaNews) – The South Korea’s LG Energy Solution continues its race for global expansion. Last week, it announced investments worth about US$ 3 billion to boost production of electric car batteries in Ochang, South Korea. According to Nikkei Asia, the increase in production comes at Tesla’s request, the world's top electric car manufacturer.
With orders worth around US$ 200 billion, the electric car market is going through rapid global growth. In this context, LG's new investment in South Korea is in some ways a rebalancing of its corporate strategy, which in the past year had bet instead on expansion abroad.
LG Energy Solution is relying on the electrification of the North American car market and on the demand for batteries that this growth will bring. To this end, it has launched several joint ventures in the United States and Canada.
Last year, along with General Motors, it announced the construction of a plant in Ohio that started production this summer.
In the same Midwestern state, the South Korean company plans to invest another US$ 4 billion together with Japan’s Honda. A third plant is set to open soon in Ontario (Canada), in cooperation with Italian-French group Stellantis.
The expansion of the Korean plant comes at a tricky time for the company. This summer, the Biden administration introduced a subsidy for US consumers who want to buy electric cars but only if they are made in North America, a move that angered automakers without a manufacturing plant in that market.
Understandably, the South Korean government complained with US authorities about discriminating against its trading partners.
Although the midterm elections halted the legislative process, some in the sector remained optimistic about a possible expansion of the subsidy. LG's decision to invest in Korea rather than in the US suggests the same.
LG Energy Solutions, which went public in Seoul earlier this year, is one of the latest companies created by corporate giant LG Corporation (or LG Group), one of South Korea’s largest and most important conglomerates, with interests ranging from household appliances and chemicals to telecommunications and consumer goods.
By setting up LG Energy Solution, the South Korean group has consolidated its presence in the emerging electric car batteries sector; today LG Energy Solution is a leader in the sector, behind only China’s CATL.
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12/02/2016 15:14
23/05/2022 15:18
