November 26, 2024

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Francois Provost (center left), chief procurement and partnerships officer at Renault Group, and Seo Won-jun (center right), vice president and head of the automotive battery department from LG Energy Solution, alongside other key executives, pose for a photo after a deal signing event at the French carmaker's headquarters in Pais on Monday. (LG Energy Solution)

LG Energy Solution, South Korea's largest electric vehicle battery maker, has secured its first major order for lithium-iron-phosphate batteries from French auto giant Renault Group's EV unit Ampere.

The contract, announced in Paris on Monday, will see LG Energy Solution supplying pouch LFP batteries for Renault’s next-generation electric vehicles over five years, from late 2025 to 2030. It involves producing about 39 gigawatt-hours of batteries, enough to power approximately 590,000 electric vehicles. The batteries will be produced at LG Energy Solution’s plant in Poland.

This also marks the first time any Korean company has secured a large-scale order for LFP batteries, a category usually dominated by Chinese manufacturers.

“This collaboration with LG Energy Solution is crucial for building our integrated European supply chain and utilizing our enduring partnership to bring forward innovative and cost-effective solutions,” said Francois Provost, Renault's chief procurement and partnerships officer.

LFP batteries, predominantly produced by Chinese companies like CATL and BYD, are known for their low cost, high reliability, and reduced fire risk, though they typically offer lower energy density compared to the nickel cobalt manganese batteries favored by Korean and Japanese manufacturers for premium EVs.

As the demand for affordable EVs has surged, so has the interest in LFP batteries, which are now being adopted by premium brands such as Tesla, Volkswagen, and Mercedes-Benz.

In response to this market shift, LG Energy Solution, along with other South Korean battery makers Samsung SDI and SK On, have expanded their LFP battery development efforts.

“This contract proves that our LFP technology and pricing can hold their own against strong Chinese competition,” an official from LG Energy Solution said.

A key innovation of the LFP batteries to be supplied to Renault is the integration of Cell To Pack technology. This assembly method eliminates the traditional module stage, allowing battery cells to be directly incorporated into the pack. This innovation reduces weight and increases energy density by enabling more cells to fit within the same space.

The pouch CTP design by LG Energy Solution achieves approximately 5 percent higher energy density per weight compared to prismatic CTPs, enhancing overall efficiency and performance.

The CTP technology also improves safety by employing advanced thermal transfer prevention techniques, resulting in a more secure battery product. Additionally, the streamlined manufacturing process reduces the number of components and lowers production costs.

“Securing this deal with Renault, our oldest customer in Europe, will allow us to prepare solid product pipelines as we ramp up our LFP battery supply in Europe,” said Kim Dong-myung, CEO of LG Energy Solution.

By Moon Joon-hyun (mjh@heraldcorp.com)