LG Energy Solution Inks 10 Trillion Won BMW Battery Deal
First-time supply of cylindrical batteries for BMW’s pure electric vehicles
LG Energy Solution has reportedly secured a cylindrical battery project worth approximately 10 trillion Korean won and is preparing to finalize the contract. While LG did not disclose the client, industry insiders widely speculate that the batteries will be used in BMW’s next-generation electric vehicles.
On the 30th, during a conference call following the first-quarter earnings announcement, LG Energy Solution stated, “In the first quarter of this year, we secured over 100GWh of new orders for the 46 series (46mm diameter cylindrical batteries).” It is understood that the newly acquired orders are highly likely to be supplied to BMW’s next-generation electric vehicles. The contract is estimated to be worth around 10 trillion Korean won, with a supply period of approximately 10 years.
LG Energy Solution has previously supplied 46-series cylindrical batteries to Mercedes-Benz in Germany, Rivian in the U.S., and Cherry Automobile in China. The company has a track record of supplying batteries for BMW’s hybrid vehicles, but this will be the first time it supplies batteries for pure electric vehicles.
LG Energy Solution began mass production of the 46 series at its Ochang Plant in North Chungcheong Province late last year and will start production at its Arizona Plant in the U.S. by the end of this year. Including the upcoming contract, LG’s order backlog will exceed 400GWh.
On the same day, LG Energy Solution reported sales of 6.555 trillion Korean won and an operating loss of 207.8 billion Korean won for the first quarter. Compared to the same period last year, sales decreased by 2.5%, and the company shifted to a loss. The company explained that despite weak demand for electric vehicles in North America, steady demand for ESS (Energy Storage System) and cylindrical batteries helped defend sales, while the loss was due to initial stabilization costs for new ESS production bases in North America.
Lee Chang-sil, CFO, Chief Financial Officer, stated,
The proportion of ESS sales, which was less than 10% last year, has increased to the mid-20% range. We aim to raise it to the mid-30% range by the end of the year.
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LG Energy Solution Inks 10 Trillion Won BMW Battery Deal, source
