LGES plans to use LFP batteries for energy storage systems

LG Energy Solution employees pose with the company's battery product. Courtesy of LG Energy Solution

By Baek Byung-yeul

LG Energy Solution (LGES) is developing lithium-iron-phosphate (LFP) batteries that use an older and cheaper chemistry for its energy storage system (ESS) products, the electric vehicle (EV) battery maker said Monday.

Compared to lithium-ion batteries, which are being manufactured by Korea's three major battery makers, LFP batteries are less likely to overheat and are therefore safer. Made of lithium and iron phosphate, LFP batteries show weaker performance at colder temperatures than lithium-ion batteries, but they also cost less. The LFP battery industry is currently led by makers in China, as there are no Korean makers producing the products.

“We have already developed and mass-produced LFP anode materials for EVs. Considering the advantages of LFP materials, we are trying to mass-produce them for application first on ESS products that place importance on cost competitiveness,” a company official said during a conference call for third-quarter earnings, Monday afternoon.

The official added the company is developing cobalt-free, low-cost batteries for EVs that can overcome the disadvantages of LFP batteries.

Since Tesla announced on Oct. 20 that it would expand the use of LFP battery-powered EVs, the batteries have gained keen attention because Korea-based EV battery makers ― LGES, Samsung SDI and SK on ― have not officially announced whether they will also join the development drive.

Regarding the company's plan to list on the stock market, LGES said it is going through a pre-listing review process with the Korea Exchange (KRX), but did not mention an exact listing date.

In 2020, LGES was spun off from LG Chem and unveiled a plan to make its KOSPI debut in October of this year. But the IPO process was paused when GM decided to expand its battery recall after a number of its Bolt EVs caught fire in the U.S. in July.

GM initially recalled only about 69,000 of the EVs, which were powered by LGES batteries produced between 2017 and 2019, but later expanded it to the latest production volume. On Aug. 20, GM said it would expand the recall to all Bolt EVs equipped with LGES batteries, adding this would cost $1.8 billion.

After negotiating with GM, LGES said earlier this month that it has set aside 620 billion won in addition to the 91 billion won it secured in the second quarter.

“To be listed on the KOSPI, we are going through a pre-listing review process, although the IPO process was delayed due to the GM recall issue,” the company official said. “We will faithfully proceed with the remaining IPO procedures. The listing is intended to proceed as quickly as possible.”