LG Energy Solution to mass produce ‘Tesla batteries’: CEO

LG Energy Solution CEO Kim Dong-myung [Courtesy of LG Energy Solution]

LG Energy Solution CEO Kim Dong-myung revealed the company’s plans to commence mass production of 4680 cylindrical batteries, known as Tesla batteries, as early as August 2024. He announced the plans during a press meeting ahead of his attendance at the Korea Battery Industry Association (KBIA)’s board meeting held in Seoul on Thursday, where he was sworn in as chairman.

Kim shared that discussions are currently ongoing with numerous clients regarding the supply of 46mm diameter batteries.

When questioned about plans to manufacture the 46mm batteries at the company’s Nanjing factory in China, Kim responded, “We plan to initially start production in South Korea, and we are considering various options afterwards.”

LG Energy Solution is currently prepping a production line for the 4680 batteries at Ochang Energy Plant.

Kim’s participation in the meeting is his first major move since taking on the role of CEO at LG Energy Solution. He recently confirmed his discussions with GM Chairman Mary Barra, where he expressed a willingness to collaborate with the U.S. partner. “We discussed various forms of cooperation, including the soon-to-begin production at the Tennessee 2 plant,” Kim told reporters.

Addressing GM’s request for sharing the Advanced Manufacturing Production Credit (AMPC), Kim explained, “AMPC is not a matter that is exclusive to GM, and we need to find a satisfactory solution that will strategically benefit both parties,” but added, “We have not concluded discussions on the AMPC yet.”

The AMPC is a subsidy provided by the U.S. government under the Inflation Reduction Act (IRA) to companies selling batteries produced at U.S. factories. GM operates Ultium Cells, a battery joint venture, jointly with LG Energy Solution, and is known to demand over 50 percent of the AMPC to match its stake in the JV.

While battery manufacturers may inevitably need to hand over some of the AMPC to their JV partners or clients, the issue is how much, given that the AMPC significantly impacts operating income and profitability. LG Energy Solution reported an operating profit of 2.16 trillion won ($1.62 billion) in 2023, with the AMPC accounting for 676.8 billion won.

Kim also revealed plans for the mass production of lithium iron phosphate (LFP) batteries starting in the second half of 2025 while operating a joint venture factory with Hyundai Motor in Indonesia from April 2024 onwards. Regarding the lowered production rates in the company’s Polish factory in the fourth quarter of 2023, Kim said, “We will monitor the market and respond accordingly.”