LG claims to be in negotiations with Tesla about supplying batteries from its Arizona plant
- ByStartupStory | January 28, 2023
LG Energy Solution announced on Friday that it is in “active negotiations” with Tesla (NASDAQ:TSLA) and electric car startups about supplying batteries from the supplier’s projected Arizona factory in the United States.
LG Energy Solution, which presently sells batteries to Tesla in China, has stated that it is reviewing investments in the planned Arizona battery production. The remarks were made during a conference call.
LGES, which provides batteries to EV manufacturers like Tesla and Lucid, had a successful 2022. In 2022, the battery manufacturer reported consolidated revenue of KRW 25.6 trillion (USD20.7 billion) and operating profit of KRW 1.2 trillion (USD974 million). The company also intends to raise annual revenue by 25-30% and capital expenditure by more than 50% in 2023.
Chang Sil Lee, CFO of LG Energy Solution, noted increased demand for electric vehicles as a big driver for the battery sector. Lee stated that LGES’ performance in 2022 was mostly due to economies of scale and other cost reductions.
“A record-high annual revenue was made possible, as battery shipment has increased across all product line-ups in our proactive response to the increased demands for EVs and power grid energy storage systems (ESS)… Thanks to economies of scale led by sales growth, cost saving achieved through improving productivity, and expanding price-competitive metal sourcing, annual operating profit has also shown a significant growth compared to the previous year,” Lee said.
LG Energy Solution is quickly becoming a prominent player in the rapidly expanding electric car sector. Throughout the year, LGES has expanded its links with automakers by starting production at the GM Ultium Cells facility in Ohio and announced new partnerships with Stellantis and Honda. By the end of the year, the company plans to boost its global production capacity to 300 GWh.
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