LG accelerates mass production of NCMA batteries and expects revenue to double by 2025!

Recently, foreign media reported that General Motors and LG Chem's NCMA battery research and development and mass production plans are expected to be brought forward to next year. The former is planning to equip two electric vehicles expected to be launched next year with NCMA batteries, and the latter is also making necessary preparations for the mass production of NCMA batteries.

L&F, one of LG Chem's suppliers, is the world's first manufacturer to mass-produce NCMA cathode materials. According to foreign media reports, L&F is currently seeking to expand its cathode material production line at its Daegu plant in South Korea. The company plans to increase its current annual output from 30,000 tons to 40,000 tons by the end of this year. It is expected that the utilization rate of NCMA cathode materials will begin to rise from the middle of next year.

L&F began supplying high-nickel NCMA cathode active materials to LG Chem in June this year, and the company expects supply volumes to continue to increase in the future as LG Chem will subsequently supply NCMA batteries for GM's new vehicles.

The cooperation between LG Chem and GM can be traced back to December 2019. At that time, the two companies signed an agreement to establish a battery joint venture "Ultium Cells LLC" with a total investment of 2.7 trillion won (about 15.8 billion yuan), which will produce NCMA batteries in Michigan and establish a battery brand "Ultium". The two parties plan to complete the development of NCMA batteries by 2022 and equip GM's new cars with NCMA batteries.

At that time, relevant sources revealed that the NCMA battery jointly developed by LG Chem and General Motors is expected to reduce the cobalt content by 70% compared to the NCM battery, while increasing the nickel content by 90%. The addition of aluminum will help improve the range and stability of electric vehicles under the premise of high nickel . The battery capacity can range from 50-200KWh and can support a range of up to 400 miles (about 644 kilometers), which is close to the range of Tesla Model 3 long-range rear-wheel drive board.

LG Chem's recent development can be described as smooth sailing.

First, LG Chem is not afraid of the impact of the coronavirus pandemic. It achieved a net profit of 419.1 billion won (US$350 million) in April-June this year, an increase of more than 11 times from the previous quarter and 5 times from the same period last year.

Secondly, from January to June this year, LG Chem occupied 24.6% of the global electric vehicle battery market, ranking first in the world, and its cumulative battery consumption reached 10.5GWh, an increase of 82.8% over the same period last year. CATL, which ranked first in the world last year, ranked second with a market share of 23.5%.

Third, it is understood that LG Chem currently has orders worth 150 trillion won (about 872.5 billion yuan). LG Chem will remain busy in the next five years and its revenue is expected to double in 2025, so it has nothing to worry about.

In addition, with Tesla's additional orders for LG Chem batteries, it is not ruled out that LG Chem will build another factory to increase production capacity.

In the secondary market, LG Chem's stock price has doubled in the past four months recently, approaching its highest point in 10 years.