After recent reports of LG Chem Ltd tripling its battery production, investors are beginning to notice the electric vehicle (EV) battery supplier, among other, similar companies, as well as the growing need for batteries to keep up with the supply of new EVs hitting the streets.
Now, according to Bloomberg, as battery suppliers like LG Chem receive billions of dollars from EV companies, they wield new power in the market, indicating a major shift in the supplier-manufacturer relationship of automobile production.
The shift also gives major buying power and leverage to LG Chem Ltd, and the dozen companies spread across Asia which are supplying EV batteries to every company making all-electric cars currently on the market.
Two of the world’s leading battery producers of electric vehicles (EV), Contemporary Amperex Technology Co. Ltd. and LG Chem Ltd., have signaled on joining projects that could bring in $20 billion investment in supply chains in Indonesia, according to the their government. #TGIF
— ICMSS FEB-UI (@ICMSSFEBUI) October 23, 2020
Sam Jaffe, managing director of energy-storage consulting firm Cairn ERA, told reporters, “There are not enough batteries to fulfill the automakers’ near-term promises.” He continued, “A lot of new battery factories are being built. But there is a battery-supply problem in the near term. All of the incumbent automakers are scrambling at this point.”
The high demand of EV batteries, amidst a world trying to transition to sustainable transportation, marks a major position of power for battery makers like LG Chem Ltd, as well as others. While EV makers have traditionally held the gauntlet for EVs since their inception, though now suppliers will have a major stake in the market at large.
Tesla previewed at its battery day it plans to debut its own ‘tabless’ 4680 battery cells, which will be cheaper to produce, plus increase range of its vehicles. Tesla’s continued vertical integration will allow it to bypass reliance on third party suppliers, in what looks like a move from Apple in making its own silicon.
