이 기사는 2022년 01월 13일 08시07분 thebell에 표출된 기사입니다

LG Energy Solution is expected to raise up to 10.2 trillion won ($8.6 billion) from what could be South Korea's biggest ever initial public offering, with more than half of the proceeds set to be used to expand its production capacity in the US.

The South Korean electric vehicle battery maker said it would spend 8.8 trillion won of the total proceeds from the planned IPO on production expansion in a registration statement filed with the country’s financial authorities.

Especially, the largest portion of 5.6 trillion won will go to the US where global automakers are vying for a bigger share of the electric car market. The US electric vehicle market is expected to grow at an average annual rate of 40%, faster than those of China and Europe.

LG Energy Solution is competing with SK On to gain the upper hand in the US market. The electric battery unit of SK Innovation has partnered with US automaker Ford to build three new BlueOval SK battery plants – one in Tennessee and two in Kentucky – which will have a combined capacity of 129 GWh. This will boost SK On’s US production capacity to 150.5 GWh by 2025.

LG Energy Solution is working with General Motors and Stellantis to build battery factories in the US with a combined production capacity of 105 GWh. Additionally, it plans to enhance the capacity of its Michigan plant from 5 GWh to 40 GWh.

“We are collaborating with General Motors, Hyundai Motor and Stellantis to expand battery production capacity and while details cannot be given now, there are other companies in talks (about partnership),” said Kwon Young-soo, LG Energy Solution’s chief executive officer.

LG Energy Solution’s market share in the US is around 29%, lower than 44% in Europe – which also explains the company’s heavy investment in the US market.

In contrast, LG Energy Solution appears to be less focused on the Chinese market where the company plans to spend 1.2 trillion won for capacity expansion. This may reflect the fact that while China is the world’s largest electric vehicle market, it is firmly dominated by local players.

The Chinese government has supported local battery makers by providing subsidies. China’s CATL, the world's largest electric battery battery maker with about a 30% share of the global market, also benefitted from strong support from the government.

China will end subsidies for domestic battery makers next year, which could lead to more opportunities for foreign players including LG Energy Solution. However, local battery makers are likely to continue to have an edge over their foreign rivals in terms of pricing and sales network.

LG Energy Solution has two battery plants in Nanjing with a combined production capacity of about 20 GWh. (Reporting by Eun-a Jo)