Summary:
Electric car maker Tesla’s global success has created immense wealth for various stakeholders ranging from battery makers to individual investors.
However, with a single order from Tesla, a relatively unknown South Korean family has entered the chat and now part of the ultra-rich. L&F Co., a producer of high-nickel cathodes, has seen its shares surge by 82% this year after winning a $2.9 billion order from Tesla, reports Bloomberg.
This order has propelled Chairman Hur Jae-hong and his related family members to become wealthy, with their listed holdings worth more than $800 million, according to Bloomberg Billionaires Index.
The success of L&F Co. highlights the growing importance of companies that provide components or materials used to make electric cars, which have surged in recent years, generating huge amounts of wealth for their owners.
L&F Co. was established in 2000 as an expansion of electronic-component manufacturer Seronics Co., which was founded by Hur Jae-hong’s grandfather in 1968. Seronics owns a 14.4% stake in L&F.
The company began developing cathode materials for rechargeable lithium-ion batteries in 2005 and has since become a leading producer of these materials in the global market. L&F Co.’s sales surged tenfold from 2020 to 2022, reaching $2.9 billion, with LG Energy Solution accounting for as much as 80% of last year’s revenue.
The recent $2.9 billion order from Tesla marks a significant milestone for L&F as it is the first time the electric-car maker has become a direct client of the company, providing L&F with one of its biggest contracts ever.
The order has propelled the family behind L&F, who are linked to South Korean conglomerates LG Group and GS Group, to become ultra-rich, with their listed holdings now worth more than $800 million.
L&F is currently seeking to diversify its customer base and reduce its reliance on LG Energy Solution, with the aim of generating 30% of sales from unidentified manufacturers, including Tesla, by 2025.
The company signed a deal with US battery recycling company Redwood Materials in 2021, headed by Tesla’s former chief technology officer, JB Straubel, which could lead to new customers for L&F.
