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| President Moon Jae-in speaks during his visit to City Hall in Madrid, Spain, June 15 (local time). Yonhap |
By Baek Byung-yeul
While European nations are seeking to attract LG Energy Solution (LGES) to build electric vehicle (EV) battery-manufacturing facilities on their turf, Spain is apparently ahead of the U.K. in the race, according to a high-ranking industry official, Thursday.
"In the race to invite LGES's new battery cell-manufacturing factory, Spain is taking the lead over the U.K. in the race," the official said on condition of anonymity, adding that Spain, which has a large automotive industry, will be a more attractive destination for the battery-making affiliate of LG Group to establish a factory.
LGES has operated a battery cell-manufacturing facility in Wroclaw, Poland, since 2016. The plant has an annual production capacity of 70 gigawatt-hours. Through the Poland facility, the company has supplied its battery cells to numerous carmakers such as Volkswagen, Audi and BMW. Clearly, Poland has advantages in terms of the supply of water, electricity and relevant infrastructure.
The company recently unveiled plans to expand the production capacity in Poland to 100 gigwatt-hours and add a new facility in Europe.
According to a senior government official, U.K. Prime Minister Boris Johnson expressed his wish to attract LGES's factory during President Moon Jae-in's visit there last week. However, industry officials presumed that the U.K. wouldn't be a favorable option for LGES, considering the country's high labor cost and relatively rigid union culture.
"The reason why Spain is considered a more favorable choice for LGES is that the country already has industrial facilities for the automotive business. Spain is the second-largest car manufacturer in Europe, after Germany, but the country doesn't have any factories for producing EV batteries," the government official said.
Earlier this year, Spanish media reported that Spain's government was pushing for a plan to convert Nissan Motor's car production factory in Barcelona into an EV battery production facility. Nissan has operated the factory since 1983, but decided to close the facility in December of this year to streamline its business operations. To preserve thousands of jobs, the regional government of Catalonia is planning a project to build a battery production facility.
Against this backdrop, there is speculation that an investment proposal in Spain may be made as LGES CEO Kim Jong-hyun accompanied President Moon's state visit to that country. During his visit to Spain, President Moon emphasized the two countries need to forge a partnership in the green mobility sector including EVs and hydrogen fuel cell vehicles.
Regarding the issue of establishing a new battery manufacturing plant in Europe, LGES said it is seeking to add a battery-making facility, while nothing has been decided. "LGES has been reviewing various countries for expansion, but nothing has been decided yet," the company official said.
Industry watchers say Spain is expected to see a rapid growth in the EV business due to growing demand for new types of cars and the Spanish government's efforts to nurture related industries.
According to the Korea Trade-Investment Promotion Agency (KOTRA), the Spanish government continues to offer incentives for EV purchases to expand the number of registered EVs to 250,000 by 2023. Also, the country plans to secure more than 100,000 EV charging stations by 2030, opening new business opportunities for Korean companies in related industries.
"It is expected that Korean companies will be able to advance into the Spanish market by supplying equipment needed for charging stations or EVs. Due to the weak manufacturing base there, Korean firms are expected to have more export opportunities," the agency said.
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