LG Energy Solution Wins 10 Trillion Won EV Battery Supply Deal

LG Energy Solution is said to have locked in a long-term supply agreement worth approximately 10 trillion won for 46-millimeter cylindrical batteries, spanning roughly ten years. The customer has not been officially disclosed, but market watchers believe the cells are headed for BMW’s next generation of all-electric vehicles.

Speaking on a conference call after its first-quarter earnings release, LG Energy Solution revealed it had booked more than 100 GWh of new orders for its 46-series cylindrical cells during the quarter. The battery maker already delivers this cell format to automakers such as Mercedes-Benz in Germany, Rivian in the United States, and Chery Automobile in China. While LG Energy Solution has previously supplied batteries for BMW’s hybrid models, this would be its first contract for cylindrical cells destined for the carmaker’s pure electric lineup.

Late last year, LG Energy Solution kicked off mass production of the 46-series cells at its Ochang plant in North Chungcheong Province, South Korea, and plans to start manufacturing the same format at its Arizona facility by the close of this year. Factoring in this latest deal, the company’s total order backlog is expected to surpass 400 GWh.

For the first quarter, LG Energy Solution reported revenue of 6.555 trillion won and an operating loss of 207.8 billion won. Sales dipped 2.5% from the previous year, and the company swung to an operating loss. Management attributed the softer top line to weakening electric-vehicle demand in North America, partially offset by steady deliveries of energy storage systems (ESS) and cylindrical batteries. The operating loss was driven chiefly by ramp-up and stabilization costs tied to new ESS production capacity in North America.

Chief Financial Officer Lee Chang-sil noted that ESS now represents a mid-20% share of total group sales, up from less than 10% last year, and the company aims to grow that proportion to the mid-30% range by the end of the year.