On April 6, the National Highway Traffic Safety Administration (NHTSA) said it was reviewing the defective batteries produced by LG energy solution to ensure that all vehicles with defective batteries had been recalled. Documents published on NHTSA's website show that 138324 vehicles were involved in the survey.
After receiving complaints about stellantis, Volkswagen, general motors, Hyundai and Mercedes Benz vehicles, US regulators began to investigate the power batteries produced by LG new energy from April 1. According to NHTSA, since 2020, the five automobile manufacturers have taken active recall measures because they are worried about the fire risk caused by the internal failure of power batteries.
According to the document, NHTSA plans to contact South Korean LG company and its customers to inform them of "this fault and ensure the safety recall of vehicles in due time". LG new energy said it would fully cooperate with the investigation and said in a statement, "we understand that NHTSA's latest requirements are a follow-up procedure to check whether the same or similar batteries are supplied to other automobile manufacturers".
"NHTSA's official procedures and agreements with vehicle customers have been completed for major recalls such as GM bolt and Hyundai Kona / IONIQ, so no additional problems are expected." LG new energy spokesman explained the reasons for the previous recalls.
"At present, the cause of FCA Pacifica plug-in hybrid models (17000 vehicles) is under investigation; for the recall of Volkswagen id.4 (351 vehicles), the main reason is that there are simple welding defects in the flexible circuit board connected to the battery. At present, the substrate supplier has improved the process of the module," the spokesman added. "As for Mercedes Benz, the number of vehicles recalled due to poor welding is one."
Founded in December 2020, LG new energy is a wholly-owned subsidiary of LG Chemical battery business. Its main customers include Tesla, general motors, Hyundai, Volkswagen, Renault, Volvo and other well-known car companies. As the world's second largest power battery manufacturer, the recall of LG new energy power battery due to safety problems has lasted for two years, involving hundreds of thousands of electric vehicles from major car companies.
In February 2020, Mercedes Benz reported to NHTSA the potential safety hazard of the 2019 smart fortwo battery: the defective electric arc may ignite inside the cell, thus increasing the risk of fire.
In October 2020, South Korea's Ministry of land and transportation ordered Hyundai to recall about 26000 Kona EVs, and then Hyundai recalled about 51000 Kona EVs in overseas markets Since its launch in 2018, there have been 13 spontaneous combustion accidents.
In March 2021, Hyundai Motor announced to expand the recall scope of models affected by LG new energy power battery defects, including three models of Kona, IONIQ and elec City, with a total of 81701 vehicles. Hyundai paid a recall cost of 1.4 trillion won (about 8 billion yuan), of which LG compensated 70% of the cost, or 980 billion won (about 5.6 billion yuan).
In August 2021, GM decided to recall about 143000 bolt models, which had more than 13 spontaneous combustion incidents. The investigation results show that the battery used by bolt has two rare manufacturing defects, namely, the folding of the battery diaphragm and the damage of the battery anode. According to GM's estimate, the recall loss reached $2 billion (about 12.8 billion yuan), of which LG compensated 95% of the cost, or $1.9 billion (about 12.2 billion yuan).
In February 2022, FCA of stellantis group recalled 16741 Pacifica plug-in hybrid vehicles in the United States after receiving 12 vehicle fire reports. The recalled models were produced between 2017 and 2018 and are equipped with hybrid battery packs produced by LG. Stellantis said at the time that "whether the battery pack is defective has not been determined, and the root cause of the fire has not been finalized".
In March 2022, Volkswagen recalled 351 id.4 models produced in 2021, saying that these vehicles may have faults leading to accidents while driving. The reason is that there are insufficient welding points in the power battery and unreliable connections in the high-voltage battery.
NHTSA survey report shows that the batteries with problems in LG new energy mainly come from its ochang plant in South Korea, and the production time is concentrated in 20172019. It is worth noting that LG established a power battery factory in Nanjing, China as early as 2015. Therefore, most of the models equipped with LG batteries in the Chinese market come from the Nanjing factory, and the problem batteries are not involved at present.
Taking into account the backlog of orders in the global market of LG Kwo , Zeng said that "yingshou Kwo will be the first in the global battery market this year".
LG new energy completed an IPO with a scale of 12.8 trillion won in January this year. The market value on the first day of listing reached 118.17 trillion won (about 616.1 billion yuan), and the current market value is about 84 trillion won (about 438 billion yuan). Its competitor Contemporary Amperex Technology Co.Limited(300750) currently has a total market value of 1.15 trillion yuan.
In order to surpass Contemporary Amperex Technology Co.Limited(300750) , LG new energy has been actively expanding its production worldwide since this year. Up to now, LG new energy has announced to build more than three joint venture power battery plants with general motors in North America. According to LG's new energy plan, by 2025, the annual battery capacity in North America alone will exceed 200gwh.
In March this year, LG New Energy announced that it plans to invest US $1.4 billion to build a plant in Arizona by 2024. It is expected to start construction in the second quarter of this year. It will be mass produced on a large scale in 2024, with an annual capacity of 11gwh. At that time, the plant will also become LG new energy's first cylindrical battery plant in the United States.
In addition, the battery plant jointly built by LG new energy and stellantis group is located in Ontario, Canada. The plant is also expected to be put into operation in 2024, but the annual capacity will be higher than that of the plant in Arizona, reaching 45gwh.
Although Contemporary Amperex Technology Co.Limited(300750) also heard the news of investing US $5 billion to build a new plant with an annual capacity of 80gwh in the United States, it is undeniable that the current power battery market in the United States is still dominated by the preconceptions of battery manufacturers in Japan and South Korea. Tesla's battery supplier is Panasonic, GM's battery supplier is LG new energy, and Ford's battery supplier is ski. This partnership has lasted for many years.
Now LG new energy has been publicly investigated by the US regulatory authorities for battery problems. One after another, the potential safety hazard is undoubtedly consuming the trust of consumer customers and consumers, and making it farther and farther away from the goal of surpassing Contemporary Amperex Technology Co.Limited(300750) .
According to the latest data of SNE research, a Korean market research institution, in February 2022, LG new energy's global power battery installed capacity was about 7.4gwh, with a market share of 15.8%, ranking second in the world. In the same period last year, LG new energy's market share in the world was 25.9%, with a year-on-year decrease of 10%, further widening the gap with Contemporary Amperex Technology Co.Limited(300750) .
On April 7, LG New Energy announced that its revenue in the first quarter of this year was 4.34 trillion won (about 226796 billion yuan), an increase of 2.1% year-on-year and a decrease of 2.2% month on month; The operating profit was 258.9 billion won (about 1.352 billion yuan), a year-on-year decrease of 24.1% and a month on month increase of 242%. Although the operating profit decreased significantly year-on-year, it was still 75.1% higher than the market forecast.
