LG Energy Solution CEO Kim Dong-myung confirmed that the company has finalized its first supply agreement for the advanced 46-series cylindrical batteries with a legacy automaker.
“Just days ago, our Arizona subsidiary secured a multiyear contract to supply the 46-series to a major client. The key aspect of this deal is that it involves a legacy company that hasn’t typically used cylindrical batteries,” said Kim during a shareholders’ meeting in Yeouido, Seoul, on Thursday. This marked Kim’s first address to shareholders since he was appointed CEO in 2023.
While specific details of the deal remain undisclosed, Kim told reporters that the annual supply volume will exceed 10 gigawatt-hours, enough to power approximately 130,000 electric vehicles. The contract, involving nickel, manganese and cobalt batteries measuring 46 millimeters in diameter, is expected to be valued at billions of dollars. These cells offer a higher energy density compared to the existing 21-millimeter products.
Since the client is a traditional automaker, Tesla and Rivian are ruled out, leaving Mercedes-Benz as a likely partner. LG Energy Solution reportedly secured cylindrical cell supply deals with all three carmakers last year, but Kim did not mention the German automaker by name.
Regarding the three-year extension of LG Energy Solution’s cash contribution to the Canadian branch of NextStar Energy, a joint venture with Stellantis, Kim emphasized that the company’s business plan remains unchanged, with investments proceeding as planned to meet EV battery demand.
Kim also outlined LG Energy Solution’s sales target for 2028, aiming for over 67.4 trillion won ($46 billion) — double its revenue in 2023. The company expects its earnings before interest, taxes, depreciation and amortization (EBITDA) to be in the mid-10 percent range, excluding Inflation Reduction Act tax credits.
When asked about China-based BYD’s new 5-minute charging technology, Kim acknowledged the Chinese competitor’s strong performance.
“BYD is showing great results primarily because it controls both battery production and EV manufacturing, allowing for optimized cost efficiency. However, their technology is not untouchable,” he said. Currently, fast-charging a vehicle equipped with Korean-made batteries takes around 15 to 30 minutes.
Kim reaffirmed LG Energy Solution’s commitment to diversifying its battery portfolio beyond EVs. On Wednesday, the company announced a deal to supply cylindrical batteries to Doosan Bobcat for small construction equipment.
The company is also expanding in the energy storage systems market, which is rapidly growing in North America, driven by the increasing demand for AI-driven data centers. Last year, LG Energy Solution secured a 50-gigawatt-hour ESS deal in the US by leveraging its domestic production facilities.
On the development of all-solid-state batteries, Kim admitted that LG Energy Solution started research and development later than its Korean competitors, with a mass production target set for 2030.
“Solid-state battery technology is inherently challenging. Our strategy is to develop manufacturing capabilities alongside technological advancements, positioning ourselves to effectively lead the industry,” he added.
hyejin2@heraldcorp.com
