Analysis: how does LG chemical become the world's largest supplier of lithium ion batteries?

The world's top three electric-car battery makers are Panasonic, AESC and LG CHEM. Panasonic supplies for Tesla, and AESC is a joint venture between NEC and Nissan. Among the top 20 global auto brands, LG CHEM has cooperated with 13 of them. Regardless of capacity, LG CHEM has become the world's "largest" suppliers of lithium batteries for cars in terms of the number of cooperative manufacturers. So the Key to LG chemistry's long-term success is its continued cost reduction, which relies on expertise in chemistry and materials science.

PrabhakarPatil, CEO of LG's chemical-power battery division, pointed out in a recent interview with foreign media that both Panasonic and AESC are consumer-electronics companies. "LG chemical is the only battery company based on chemicals and materials. After decades of in-depth research, the establishment of ingredients and the development of chemicals, each battery unit is more stable, and the core expertise is used to gradually develop battery technology. "The key factor for batteries is the material, and to be competitive is not only about scaling and reducing the cost of the material, but also about improving the properties of the material.

Cost and materials! How does LG CHEM become the world's largest supplier of lithium batteries?

Technology progress had been made in 2010, LG CHEM, contributed to the first the Chevrolet Volt (Volt).At that time, LG CHEM 's design goal is 40 miles (64 kilometers) of pure electric range, 200wh per mile, or 8 KWH. But the actual installation of the first generation of battery capacity is 16 KWH, 10 years, the service life of the attenuation 30% capacity window is only 70%, if the two factors together, will get 50% of capacity, so 16 KWH became the rated capacity.

LG chemical battery materials science in South Korea has more than 400 engineers. LG CHEM hopes to improve battery capacity and longevity through better material engineering, as well as effective capacity Windows, without compromising battery performance. Patil expects another major breakthrough by LG CHEM in 2017, faster than he had expected: "by 2017 or 2018, $30,000 electric cars with 200-mile range will be commercially mainstreamed" Though gm has not confirmed the forthcoming 2017 Chevrolet BOLT pure electric vehicles will use LG chemical battery, but the industry has been generally thought.

Chevrolet bolt of pure electric vehicles

Therefore, it is a battery based on material technology, and the mass production won’t break its quality and reliability."We have more than 50 million batteries, more than 50 million electric cars on the road, the quality and reliability are achieved the level of pharmaceutical grade, at the same time, there is no accident, it is very important for auto makers."

'I'm surprised by how much battery technology has improved in a short period of time,' Patil said. He listed the differences in power to energy ratios between hybrid and electric vehicle batteries. An electric car must have enough energy in its batteries to drive 70 to 200 miles or more. LG CHEM produces both batteries, Patil emphasizes that the difference in the ratio of power to energy between successful extreme products and energy extreme products can be 100 times greater. What LG chemistry does is customize or optimize for specific applications, which is one of the strengths of being a materials company.

How long will the next generation of battery technology have to wait to surpass current lithium batteries? Patil says it's not going to take long because it's very simple, it's a basic chemical reaction, and lithium is the third lightest element and the lightest metal. The only thing lighter than that is hydrogen, but as a gas it's very difficult to control, and if you put it in a tube, you lose it, if you liquefy it, you lose the energy advantage. Therefore, lithium is the most suitable material for batteries. It can exist in some form for a long time. In the future, lithium metal batteries may be developed.

LG chemical battery

LG CHEM is focusing most of its efforts on driving down costs. " If you look at the battery cost structure, manufacturing is not accounted for a large proportion, about 60% of the costs involved in materials, battery manufacturers material cost is mainly purchase materials, to a large extent affected by the scale and material performance characteristics. I think in terms of net to reduce the cost of materials can also do more, and through better design, customization, adjust the properties, etc., Germany also has excellent performance of the battery. Patil explains.

Most electric cars currently cost about $400 per kWh for batteries, compared with $240 for Tesla. Critics say the battery cost target of $125 per kWh is needed to match the internal-combustion engine's cost parity. Patil can't tell when to get there. With 288 batteries in the first generation and 192 in the second, LG CHEM is pushing for a strategy to reduce the number of batteries by adding extra capacity.

LG CHEM supplies batteries to 13 brands including Volkswagen, Audi and Daimler of Germany, general motors, ford of the United States, Renault of France and Hyundai of South Korea. But AESC and Panasonic currently ship more cells than LG chem. AESC is on track to sell 200,000 units a day, more than twice as many as LG chem. Panasonic, meanwhile, ships about three times as much battery pack capacity per Tesla Model as the leaf.

On the other hand, unlike most car companies that rely on suppliers to make batteries, Tesla and Nissan are relying on themselves. "Nissan is actually one of the first companies to develop and manufacture lithium-ion batteries. They have a lot of internal strength. In the 1990s, Nissan had hybrid battery packs and limited the production of lithium-ion batteries developed internally. However, I think ultimately it all comes down to cost, and a lot of executives are saying that even if we have the capability internally, if someone can come up with a more cost-effective solution, we'll buy it. Tesla is different. It is a more vertically integrated company, but it will also try to achieve cost-effectiveness through internal and external forces”. Patil said.

LG CHEM announced in April 2011 that it had opened what was then the world's largest battery plant in Ochong, South Korea, and recently added a plant in Michigan to supply batteries for the Chevrolet volt and small quantities of the SparkEV.

SPARKEV carrying LG chemical battery

LG CHEM 's 2011 proposal to capture a quarter of the global power battery market by 2015 remains to be seen, but it is certain that LG CHEM has entered the top echelon of electric vehicle battery supplier.

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