LG Energy Solution (LGES) is considering building an additional electric vehicle (EV) battery line in the United States to produce cylindrical batteries for startup EV makers there, an industry source familiar with the matter said Thursday.
“At a time when demand for EV batteries is soaring in the U.S., LGES wants to produce more there. They are especially considering improving production of the 2170 batteries which will be increasingly used by startup EV makers,” the source told The Korea Times.
The 2170 is a cylindrical lithium-ion rechargeable battery, 21 millimeters in diameter and 70 millimeters in height. LGES is better known for producing pouch-style battery cells, but is increasingly supplying cylindrical batteries cells to EV makers.
Cylindrical batteries have long been used for various devices such as cordless power tools that require high-power. As the batteries are cost effective and quality control issues are easy to handle, many EV makers as well as producers of e-bikes, e-scooters and other light EVs are increasingly adopting them.
LGES, one of the world’s leading EV battery makers, was reportedly going to build additional factories in the U.S. or Europe to supply next-generation 4680 cylindrical batteries to Tesla from 2023, but the source said starting the supply of 2170 batteries is scheduled before this.
An LGES official said the company cannot comment on issues related to clients. The 4680 batteries have higher energy density and five to six times the power output of the 2170 batteries, but industry analysts said it will take longer to perfect mass production.
While LGES is manufacturing pouch-style battery cells in the U.S. at its factory in Michigan, the company recently revealed its bid to build additional lines to assemble cylindrical and pouch batteries, and batteries used for energy storage systems (ESSs).
A senior LGES executive said the company has investment plans in the United States to meet the fast-growing demand for batteries.
“After U.S. President Joe Biden announces his Green New Deal plan, we expect the EV market in the U.S. will grow explosively as well as the ESS market. So we are trying to preemptively expand production capacity for batteries in the U.S.,” the executive said.
