Bollywood Fever: South Korea’s LG Energy Solution (LGES) is in discussions with about three Chinese suppliers to manufacture low-cost electric vehicle (EV) batteries for the European market, according to a senior executive. This move comes as the global EV industry faces a significant slowdown in demand and growing pressure on non-Chinese battery firms from automakers to reduce prices to compete with cheaper Chinese rivals.
Earlier this month, France’s Renault announced plans to incorporate lithium iron phosphate (LFP) battery technology in its mass production of EVs. Renault selected LGES and its Chinese competitor CATL as partners to build a supply chain in Europe. This decision follows the European Commission’s June imposition of an additional tariff of up to 38% on EVs imported from China after an anti-subsidy probe. This investigation has led to numerous investment commitments from Chinese EV manufacturers and battery firms in Europe.
“We are having talks with Chinese firms who will develop LFP cathode with us and produce them for Europe,” said Wonjoon Suh, leader of LGES’ advanced automotive battery division, in an interview with Reuters. Suh declined to name the companies involved. “We are considering various measures, including setting up joint ventures and signing long-term supply deals,” he added. Suh believes that such partnerships will help LGES reduce its LFP battery manufacturing costs to match those of its Chinese competitors within three years.
The cathode is the single most expensive component of an EV battery, accounting for about one-third of the overall cost of a battery cell. China dominates the global LFP cathode supply, with major producers including Hunan Yuneng New Energy Battery Material, Shenzhen Dynanonic, and Hubei Wanrun New Energy Technology, according to battery market tracker SNE Research.
Most EV batteries today use either nickel-based or LFP cathodes.
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