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LG Chem Battery Plant Production Takes Off In China

The big news in storage for the last year and a half has been the Tesla/Panasonic Gigafactory that is being built just outside of Reno, Nevada, but the incumbents in the battery game haven’t been sitting still. We reported in October that LG Chem had ramped up production in its factory in Holland, Michigan, to support the increased demand forecast for the new and improved 2016 Chevy Volt (plug-in hybrid) as well as the similarly named Chevy Bolt (fully electric car).

The Holland plant continues to ramp up production with a job fair last month looking to fill another 100 positions in the facility with several roles still available.

Paired up with the news of the production increase, LG Chem was also looking to tap its existing presence in Wroclaw, Poland, where CleanTechnica director and editor Zachary Shahan lives, to build up battery production capacity in Europe. Further stretching towards a globally distributed production presence, recent news indicates that LG Chem is also being tapped for EV batteries in China, as it recently announced an increase in production at its facility in Nanjing, China.

lg_nanjing

LG Leadership commemorating the opening of the Nanjing, China, factory | Image Credit: LG Chem

What is more impressive than the global presence is the timing on which it has been executed with the more recent increase being executed in under 2 years with construction having just started on October 30th, 2014. The new battery factory is producing batteries specifically for EVs with agreements in place with SAIC Motor Corp, Qoros, and 14 other automakers looking to get a piece of the lucrative Chinese market (per The Korea Times).

The newly opened LG Chem factory in Nanjing can currently produce enough batteries for 50,000 battery-electric cars per year, with plans to increase production to support 200,000 such cars per year by 2020. Alternately, the factory can currently produce enough batteries for 180,000 plugin-hybrid electric cars today, which seems more likely given a heavy bias in the Chinese electric vehicle market towards PHEVs.

Pulling these distributed factories together, the LG Chem battery R&D facility in Ochang, South Korea, leads the development of new chemistries and architectures, which can then be deployed to the regional battery production facilities and scaled up.

The future is looking bright for LG Chem, as it pushes to scale up for the impending EV revolution currently underway around the world. Most impressively, LG has been able to ramp up production very quickly; though, supporting 50,000 cars per year per factory is peanuts compared to the 500,000 per year or more BEVs that the Gigafactory will presumably be able to support… and note that is probably in reference to electric cars with larger batteries than the ones in the LG Chem projections.

On the plus side for LG, it should also be able to ramp up production quickly in the meantime to support sales of partner-EV-manufacturer vehicles. Having a distributed customer base will also bring more stability to the forecast for LG and allow the company to capitalize on the successes of individual auto manufacturers vs being tied to a single manufacturer like Panasonic (supplying Tesla) and AESC / Automotive Energy Supply Corporation (supplying Nissan).

In the video below, Bill Wallace, GM Director of Global Battery Systems, is out front of the Holland (Michigan) LG Chem battery factory and talks about the improvements in the battery in the second-generation Chevy Volt that were enabled largely by the partnership with LG. Sorry in advance for the awkward ending of the clip.

 
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Written By

I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in BYD, SolarEdge, and Tesla.

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