67GWh! Lithium battery giant receives another large order

On November 8, South Korean lithium battery giant LG Energy Solution said it had reached an agreement with U.S. electric vehicle manufacturer Rivian to supply it with electric vehicle batteries .

Under the agreement, LG Energy Solution will supply Rivian with advanced 4695 cylindrical batteries totaling 67GWh over five years. Detailed financial terms of the contract were not disclosed.

LG Energy Solution said the batteries will be produced at the company's U.S. plant in Arizona and will be used in Rivian's R2 electric SUV.

LG New Energy receives continuous large orders

This 67GWh power battery order is already LG Energy Solution's fourth major order since the second half of this year.

On October 15, LG Energy Solution announced that it would supply large commercial vehicle batteries to Ford, a global leader in the commercial vehicle market, and signed a long-term supply agreement with Ford for electric vehicle battery cells and modules with a total scale of 109GWh.

On October 8, LG Energy Solution announced that it had signed an agreement to supply 50.5GWh of electric vehicle batteries to Mercedes-Benz subsidiaries in North America and other regions from 2028 to 2038.

On July 1, Ampere, the electric vehicle business unit of the Renault Group, announced that it would work with LG Energy Solution and CATL to establish a lithium iron phosphate (LFP) battery supply chain in Europe. Among them, LG Energy Solution will provide 39GWh LFP batteries to Ampere from the end of 2025 to 2030. These batteries can be used in 590,000 electric vehicles and will be produced at LG Energy Solution's Polish factory.

From the above, it can be seen that LG Energy Solution has successively won a 109GWh battery order from Ford's large commercial vehicles, a 50.5GWh battery order from Mercedes-Benz's subsidiaries in North America and other regions, a 39GWh LFP battery order from Ampere under the Renault Group, and a 67GWh 4695 cylindrical battery order from Rivian, totaling 265.5GWh!

In addition, foreign media reported that LG Energy Solution will mass-produce the 4680 large cylindrical batteries ordered by Tesla in December 2024. It is reported that Tesla intends to increase the shipment volume of Cybertruck and is also preparing for the shipment of Model Y Juniper, which will be launched in early 2025.

Although the performance was poor, it exceeded expectations

LG Energy Solution announced on October 8 that it would supply 50.5GWh of power batteries to Mercedes-Benz and released its performance forecast: its operating profit in the third quarter of this year is expected to fall 40% to 448 billion won (about 2.312 billion yuan), but it is still higher than analysts' expectations because the company has successfully expanded its supply of electric vehicle batteries and batteries for energy storage systems to US customers.

On October 28, LG Energy Solution officially announced its third-quarter results this year: in the three months ending September 30, LG Energy Solution's operating profit was 44.83 billion won (about 2.313 billion yuan), a decrease of 39% from the same period last year.

The result was significantly better than the average level of 374 billion won predicted by analysts.

In terms of revenue, LG Energy Solution achieved 6.9 trillion won in revenue in the third quarter, a decrease of 16% compared to the same period last year.

Despite the decline in both revenue and profits, LGES has maintained stable cooperative relationships with important customers such as Tesla, General Motors and Hyundai Motor.

It is worth mentioning that after the financial report was released, LG Energy Solution's stock price rose by 0.9%, exceeding the 0.6% increase of the benchmark KOSPI index. This market performance shows that investors are optimistic about LG Energy Solution's long-term prospects.

Summarize

South Korean battery manufacturers are facing the problem that the development of new energy vehicles in Europe and the United States is slower than expected. In addition, if Trump repeals the Inflation Reduction Act or reduces support after returning to power, South Korea's battery industry may shrink.

Coupled with the impact of the suspension of construction of several important factories in North America, LG Energy Solution, which continues to receive large orders, still faces considerable challenges.

A realistic data is that from January to September this year, although LG Energy Solution's installed capacity of power batteries reached 72.4GWh, ranking third in the world, its market share declined year-on-year, with a year-on-year growth rate of only 4.3%, far lower than the average growth rate of 23.4%.