LG Energy Solution and Hanwha Group are pushing for comprehensive cooperation to target the future battery market. Through joint investments for constructing battery production lines in the U.S., they aim to seize the rapidly growing energy storage system (ESS) market, driven by eco-friendly energy policies, while also expanding applications in future growth sectors such as Urban Air Mobility (UAM).

LG Energy Solution and three companies from Hanwha Group (Hanwha Solutions Q Cells Division, Hanwha Momentum, and Hanwha Aerospace) have signed a business agreement concerning battery-related collaborations, including the ESS business.

The signing ceremony held at the Plaza Hotel in Jung-gu, Seoul, was attended by key figures including Lee Jae-kyu, head of the GES Division at Hanwha Q Cells; Ryu Yang-sik, head of the secondary battery division at Hanwha Momentum; Moon Seung-hak, head of electric propulsion systems at Hanwha Aerospace; Shin Young-jun, CTO of LG Energy Solution; and Jang Seung-se, head of the ESS Division. Following this MOU, LG Energy Solution and Hanwha Group plan to form a Task Force (TF) to advance specific cooperation measures.

Initially, both parties will work to dominate the burgeoning U.S. ESS market, which is rapidly growing under eco-friendly energy policies. To achieve this, LG Energy Solution and Hanwha Group will pursue joint investments to establish an exclusive battery production line for ESS in the U.S. Furthermore, they plan to develop integrated system solutions, including air conditioning systems and electrical components that accompany the battery.

With this collaboration, Hanwha Q Cells will be able to secure a stable supply of batteries for the U.S. power market. The increasing demand for ESS, driven by the expansion of renewable energy adoption, emphasizes the importance of stable product availability for stabilizing the power grid and ensuring efficient energy use. The U.S. ESS market is expected to grow more than ninefold from 9 GWh in 2021 to 95 GWh by 2031, following the passage of the Inflation Reduction Act (IRA), which is equivalent to the amount of power consumed daily by around 40 million people in South Korea. Having achieved the No. 1 position in the U.S. residential and commercial solar module market, Hanwha Q Cells plans to enhance its competitiveness by securing stable battery supply and becoming a top-class company in both the ESS development and EPC fields.

LG Energy Solution also fortified its position for long-term growth by adding a stable demand source in the U.S., which is projected to experience the most significant growth. This will further strengthen their stable three-stage business portfolio spanning automotive batteries, small batteries, and the ESS business.

In 2021, LG Energy Solution supplied the world’s largest battery, with a capacity of 1.2 GWh at a single power grid site, to the U.S. utility Vistra. Last year, they established ‘LG Energy Solution Vertak’ to also venture into the ESS system integration field.

LG Energy Solution and Hanwha Momentum are also collaborating. Hanwha Momentum specializes in providing automation engineering solutions and process equipment to various sectors, including second batteries, solar energy, displays, and automotive.

The two companies plan to collaborate on battery manufacturing equipment. Currently, LG Energy Solution is constructing joint battery production facilities with major automakers such as GM (Ultium 1, 2, 3 plants), Stellantis, and Honda, mainly focused on North America, and investments are planned to expand production capacities at existing standalone plants in Korea, Poland, and Michigan.

LG Energy Solution and Hanwha Aerospace will work together to co-develop special-purpose batteries that can be applied in urban air mobility and other areas. Hanwha Aerospace is strengthening its efforts in new growth businesses.

An official from LG Energy Solution expressed, “This collaboration is expected to significantly contribute to enhancing the competitiveness of each company’s battery-related businesses.” They added, “LG Energy Solution will make its utmost efforts to expand its customer value influence in the U.S. solar and ESS business and provide comprehensive eco-friendly energy solutions to customers.”

A representative from Hanwha stated, “We have decided to collaborate with LG Energy Solution, which is constructing large-scale production facilities in the U.S. to target the growing ESS market driven by eco-friendly energy policies.” They further stated, “We will maximize synergy through various collaborations in battery manufacturing facilities and the development of special-purpose batteries both domestically and internationally.”

Lee Sang-jin