South Korean battery maker LG Energy Solution (LGES) said it will soon beat Chinese rival CATL (300750) in the global race to the electric vehicle battery market, according to the Korea Herald. ).
According to the report, LG New Energy CEO Kwon Young-soo said at an online media conference, "We have received more orders, so we will surpass our competitors, and the market value gap between us and CATL will also narrow. . Of course I see an opportunity", and the "competitor" mentioned here also refers to the CATL era.
LGES will hold an IPO on Jan. 27 with 34 million new shares priced between 257,000 and 300,000 won ($218.38-$254.92) each, and is expected to raise up to 12 trillion won, with a market capitalization of about 12 trillion won. 70 trillion won. For now, the market value of CATL is about 236 trillion won.
The company said it will use the funds to build more factories overseas, expand investment in research and development, and improve battery standards. Analysts said the IPO could make LGES the third most valuable company in South Korea, behind Samsung Electronics and SK Hynix.
Kwon emphasized that the difference between LGES and CATL is "quality battery". According to data released by SNE Research, a South Korean market research institution, in the first eleven months of 2021, CATL is far ahead with nearly one-third of the market share, while LGES’s share is 20.5%, and there is still a big gap.
LGES customers include General Motors and Tesla, and operates factories in the U.S., Poland, China and Indonesia. In addition, LGES also plans to build two new factories in Ohio and Tennessee by 2025 in a joint venture with GM.
"Other than that, we don't currently have any plans to expand the factory, but a joint venture is always an option. However, all the factories in Poland will be our own," Kwon said. Kwon also noted that the factory needs to be close to the automaker . LGES plans to build "smart factories" using artificial intelligence technology, as overseas factories need skilled managers and can share skills through the latest technology. "We call it data-driven decision-making. We believe it will reshape the way we produce batteries."
While some automakers are now experimenting with making their own batteries, Kwon believes "they're not going to threaten us," citing supply chain issues and patents as obstacles. "It's a challenge to maintain a stable supply without paying high royalties while using battery technology."
