LG Energy Solution is also working with existing suppliers to add operations in North America, he said. The strategy is part of a broader plan to add reliable suppliers in the region. It aligns with a provision in the Inflation Reduction Act that provides credits for certain products, including key battery components domestically produced and sold by a manufacturer.
Lee, who led Continental’s North America business for two years before joining LG Energy Solution in 2022, said the semiconductor shortage pushed automakers and suppliers to over-prepare, especially for EVs.
Electric vehicles are “forcing us to have longer value chains,” he said. “We are trying to be more risk averse in terms of our supply chain from OEMs down to our suppliers.”
That means being open to holding stockpiles of key items for batteries rather than relying on just-in-time delivery, he said.
“There is more vertical integration and long-term planning in our industry,” he said. LG plans the sourcing of battery components, such as metals, raw materials and cathode active materials far ahead of cell production, he said. At the same time, the company is considering recycling methods for end-of-life batteries.
LG and its peers are also exploring technology that could be decades from production. It has invested in solid-state battery companies and dedicates R&D to future battery chemistries and formats. But for the foreseeable future, the basic chemistry and format is unlikely to change, Lee said.
Most battery manufacturers produce nickel manganese cobalt cells, which LG specializes in, for lithium ion batteries or iron phosphate cells for lithium iron phosphate batteries.
“Right now, if you look at all the plants coming online, the chemistry and the format is mostly determined for the next 10 to 15 years,” Lee said. “After that, there may be some significant adjustments. But the die is cast for the next 10 to 15 years.”
