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BusinessLG Energy Signs Multi-Billion-Dollar LFP Battery Deal with Renault

LG Energy Signs Multi-Billion-Dollar LFP Battery Deal with Renault

LG Energy Solution Ltd., the world’s second-largest battery manufacturer, has secured a multi-billion-dollar contract to supply lithium iron phosphate (LFP) batteries to Renault Group’s electric vehicle (EV) division, Ampere. This landmark deal marks South Korea’s entry into the LFP battery segment, previously dominated by Chinese giants CATL and BYD.

Under the five-year agreement, LG Energy will deliver LFP batteries with a total capacity of approximately 39 GWh from late 2025 through 2030. This capacity is sufficient to produce around 590,000 electric vehicles. The batteries will be manufactured at LG Energy’s facility in Poland, designed to power Ampere’s next-generation EV models.

While the exact financial terms of the deal remain undisclosed, industry analysts estimate the contract to be worth several trillion won, equivalent to billions of dollars.

François Provost, Renault’s Chief Procurement, Partnership, and Public Affairs Officer, commented, “We worked hand in hand with LG to set up an integrated value chain in Europe. Our long-term relationships have enabled us to build this unique solution in terms of technology and competitiveness.”

Korea’s First Major LFP Battery Deal Surpassing China

The deal is a significant milestone for LG and South Korea, marking their first large-scale LFP battery supply contract in Europe, one of the fastest-growing markets for EVs. Traditionally, South Korea’s top battery makers, including LG Energy, SK On Co., and Samsung SDI Co., have focused on high-cost nickel-cobalt-manganese (NCM) cells. The shift towards producing more affordable LFP cells is driven by growing demand from major EV manufacturers such as Tesla Inc.

LFP batteries, predominantly produced by Chinese companies like CATL and BYD, are cheaper to manufacture and more stable compared to NCM batteries, making them ideal for low-end EV models. Recognizing this, LG Energy has converted part of its energy storage system (ESS) production lines in Nanjing, China, to produce LFP batteries, with mass production slated for 2025.

Innovative Cell-to-Pack Solutions

LG Energy will supply Renault’s Ampere with pouch-type LFP batteries utilizing advanced cell-to-pack (CTP) technology. CTP technology eliminates the module stage, forming cells directly into a pack structure, which reduces weight and manufacturing costs while enhancing space utilization. LG Energy is the first in the industry to apply this technology to pouch-type batteries.

Pouch-type CTP batteries offer about 5% higher energy density per weight compared to prismatic CTP batteries. LG Energy has also improved battery safety by increasing the robustness of the battery pack and incorporating heat transfer prevention technology.

Expanding Battery Portfolio

This supply agreement broadens LG Energy’s product portfolio to include various chemistries in pouch-type batteries, such as high-nickel NCMA, high-voltage mid-nickel NCM, and LFP. This diverse range of products enables LG to cater to different consumer needs, from premium EVs to more affordable entry-level models.

This strategic move not only strengthens LG Energy’s position in the global battery market but also highlights South Korea’s growing capabilities in the EV sector, challenging the dominance of Chinese battery manufacturers.

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