LG Chem succeeds in becoming the market leader in traction batteries for electric vehicles
The Korean company LG Chem is one of the suppliers of traction batteries for the conveyor of Tesla in Shanghai, but at the same time, it cooperates with other manufacturers of electric vehicles. In just one year, it was able to rise from fourth to first place in the ranking of the largest manufacturers of traction batteries for electric vehicles, occupying almost a quarter of the segment.
Last year, the share of LG Chem did not exceed 10%, but now it has increased to 24%, leaving behind large manufacturers such as Panasonic and CATL. This progress is not in vain – the cost of expanding the production of batteries forced LG Chem to increase its debt load to $ 9.7 billion, and last year the company ended with an operating loss of $ 379 million. LG had to part with the business of manufacturing polarizing coatings for LCDs to reduce the financial burden of actively expanding battery production.
LG Chem expects to almost quadruple its traction battery revenues over the next five years, to $ 26 billion. It is noteworthy that last year half of LG Chem’s revenue came from the petrochemical business. If the goals set for the battery sector are achieved, then the Korean company will develop a very specific specialization. According to IHS Markit experts, the traction battery market will grow by 25% per year in the coming years. LG Chem spent $ 3.24 billion to expand its production last year, double the amount it spent a year earlier. Investors appreciated the zeal of the Korean manufacturer, as LG Chem’s share price has risen 60% since the beginning of the year.
