Korean battery majors ramp up next-gen cylindrical battery production

2022.06.21 14:06:37 | 2022.06.21 14:36:56

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South Korean battery majors are competitively ramping up the production of cylindrical batteries as demand for next-generation cylindrical batteries with improved power and driving range are set to rise after global EV giant Tesla’s employment of new 4680 cylindrical cells in its cars.

According to battery industry sources on Monday, LG Energy Solution is seeking to bolster the output of cylindrical batteries at its factories in South Korea, the United States, and China. It will invest 730 billion won ($566 million) in its Ochang plant in North Chungcheong Province, Korea to produce 13-gigawatt hours (GWh) worth cylindrical batteries including next-generation 4680 batteries in the second half of the year.

LG Energy Solution will also inject 1.7 trillion won to build a new cylindrical battery factory in Arizona, the United States, to mass-produce 15 GWh cylindrical batteries by 2024 and an additional 1.2 trillion won in its Nanjing plant in China to produce 60 GWh or higher cylindrical batteries by 2025.

Samsung SDI is also building new production lines in Cheonan, Korea and Malaysia to increase cylindrical battery production capacities by more than 20 percent. Samsung SDI has also started to develop medium- and large-sized cylindrical batteries with diameters of 46mm.

The Korean battery majors’ latest move to bump up the production of cylindrical batteries for EVs comes after Tesla started employing 4680 cylindrical cells to its EVs. The 4680 battery – named after their package size of 46 mm in diameter and 80 mm in length - offers five times more energy, six times more power capacity, and 16 percent more driving range than the previous 2170 cylindrical cells.

Market experts expect the 4680 cylindrical battery would be a game changer in the EV market.

Cylindrical batteries have typically been used in phones and power tools. But their use in electric vehicles has been on a steady decline due to their relatively small capacity and design limitations.

According to market research firm SNE Research, the market share of cylindrical batteries in the electric vehicle battery market gradually fell to 29 percent in 2018, 23 percent in 2020, and 15.6 percent in the first quarter of 2022 while the market share of prismatic batteries has exceeded 50 percent as Chinese battery makers such as CATL upped prismatic battery production.

However, industry experts now forecast that the demand for cylindrical batteries will increase from 8.3 billion in 2021 to 28.5 billion in 2030, as automakers such as Rivian, Lucid, Jaguar Land Rover, and BMWs have either already started or are considering using these high-capacity cylindrical batteries after the introduction of the 4680 battery.

Shares of LG Energy Solution traded down 0.73 percent to 408,500 won while shares of Samsung SDI traded up 1.61 percent at 568,000 won during Tuesday morning trade.

By Park Yun-gu and Susan Lee

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