LG Group and Hanwha Group have embarked on omnidirectional cooperation in the field of batteries. It is because the interests of the two groups aligned as the energy storage system (ESS) market grew worldwide.
The two groups are evaluated as having emerged as a new battery alliance as they decided to strengthen cooperation in the fields of ESS, battery manufacturing equipment, and future urban air mobility (UAM).
On Jan. 16, LG Energy Solutions, Hanwha Solutions Q Cells Division (Hanwha Q Cells), Hanwha Momentum Division (Hanwha Momentum), and Hanwha Aerospace signed a memorandum of understanding (MOU) for business cooperation at The Plaza Hotel in Jung-gu, Seoul on Jan. 16.
LG Energy Solutions and Hanwha Group will form a dedicated task force (TF) for full-fledged cooperation with this MOU as an opportunity.
An official from LG Energy Solutions said, "The specific investment scale, location, and production plan have not been decided yet, and we will form a TF to discuss it."
The expected area of cooperation between the two companies is ESS. LG Energy Solutions and Hanwha Q Cells are promoting joint investment to build a battery production line exclusively for ESS in the United States.
The size of the US grid ESS market is expected to expand from 9 GWh in 2021 to 95 GWh in 2031. ESS for power grids is used when there is surplus electricity in the power grid, such as storing power produced during the day by solar light before sending it out at night.
With this cooperation, Hanwha Q Cells plans to accelerate its solar power development and ESS business following the supply of solar modules in the US. Hanwha Q Cells announced this month that it would invest 3.2 trillion won in the United States to produce modules for solar power generation.
It is interpreted that this cooperation is an attempt to strengthen competitiveness in the field of ESS installation and operation following the solar power generation ecosystem.
Following automotive batteries and small batteries, LG Energy Solutions is being evaluated for finding a stable source of demand in the ESS field as well.
LG Energy Solutions plans to cooperate with Hanwha to catch 'two rabbits': stable procurement of battery manufacturing equipment and reinforcement of automation capabilities.
LG Energy Solutions has supplied electric vehicle batteries to 8 of the world's top 10 finished vehicle manufacturers while securing an order balance of 370 trillion won as of the end of the third quarter of last year.
Supply and automation of battery production equipment are prerequisites for stable production. There is an expectation that a stable supply through yield improvement will be possible if the company enters into strategic cooperation with Hanwha Momentum, which manufactures battery manufacturing equipment and automation equipment.
For Hanwha Momentum, this cooperation is a great opportunity. This is the first time that Hanwha Momentum has supplied equipment to LG Energy Solutions. Additional sales are expected if it succeeds in supplying to LG Energy Solutions, a global 'big hand'.