As the first SES Power to use lithium iron phosphate batteries in the power and energy storage industry, we have always firmly believed that lithium iron phosphate batteries will be very useful, even if the process is tortuous. Our products, such as lead-acid replacement products 12V100Ah, 24V100Ah, 12V200Ah, 3kwh, 5kwh, 10kwh wall-mounted smart home energy storage system, rack-mounted energy storage system, split combined high-voltage power lithium battery system, customized metal Shell lithium iron phosphate batteries, etc., almost all use cylindrical and square lithium iron phosphate batteries.

　　As a major producer of lithium-ion batteries, South Korea has always had doubts about lithium iron phosphate batteries, so they did not seriously exert their efforts on this track. But over time, things have changed significantly.

　　On July 27, LG New Energy released a financial report showing that the net profit in the second quarter of this year was 89.9 billion won, a year-on-year decrease of 85.7%; the operating profit was 195.6 billion won, a year-on-year decrease of 73%. LG New Energy said that the reason for the decline in profits was the continued disruption of the global supply chain.

　　At the same time, LG New Energy announced that it plans to produce lithium iron phosphate batteries at the LG China plant in 2023.

　　As the former "power battery king", LG New Energy mainly produces ternary lithium batteries, and its market share is comparable to that of the CATL. However, as lithium iron phosphate is gradually sought after by the market, the gap between LG New Energy and the CATL is getting wider and wider.

　　Some experts said that the penetration rate of lithium iron phosphate in the power battery field continues to increase, and Tesla and other car companies have also shifted their focus to the lithium iron phosphate route. In order to increase market share and maintain existing customers, LG New Energy must further layout. Lithium iron phosphate battery.

　　On January 27, 2022, LG New Energy landed on the Korea Stock Exchange with an opening price of 597,000 won, making it the largest IPO in South Korea’s history. At that time, the CEO of LG New Energy had said that in the global competition in the electric vehicle battery market, LG New Energy would soon defeat Chinese rival CATL.

　　Looking back, in the first half of 2020, LG New Energy's installed capacity surpassed the CATL era by supplying batteries to Tesla China. It is understood that LG New Energy and CATL both supply batteries to Tesla's Shanghai factory. Among them, LG New Energy mainly provides ternary lithium batteries for Tesla, which correspond to long-range and high-performance models, which belong to the high-end series; CATL mainly provides lithium iron phosphate batteries, corresponding to the standard battery models.

　　However, the rise of LG New Energy has not been so smooth. Data from South Korean market research agency SNE Research shows that in the global power battery installed capacity rankings in 2021, CATL ranks first with a global installed capacity of 96.7GWh and a market share of 32.6%, followed by LG New Energy, with a global installed capacity of 60.2GWh and a market share of 20.3%.

　　In the first half of this year, the gap between LG New Energy and the CATL further widened.

　　According to the data released by the above-mentioned institutions, CATL continued to dominate with 69GWh of installed capacity in the first half of the year, a year-on-year increase of 111% and a market share of 34%, continuing to widen the gap with other players; LG New Energy’s installed capacity of 28GWh the volume ranks second in the world, the growth rate has slowed down significantly, only 4%, and the market share is 14%.

　　In addition to the market share that is far from the CATL, affected by the sharp rise in the price of raw materials for power batteries, the results of LG New Energy's listing for half a year are also relatively bleak. From the perspective of the secondary market, the stock price of LG New Energy has fallen all the way after listing. As of the close on July 27, the stock price was 393,500 won, a drop of more than 34% since its listing.

　　SES Power believes that the frequency and comprehensiveness of LG's product technological innovations lag behind the CATL era, and this fundamental reason makes LG New Energy's market share continue to decrease.

　　At the same time, another reason why LG New Energy lags behind the CATL era is that it is not sensitive enough to the market. The CATL also has ternary lithium batteries, which were once the main product, but the development strategy of "walking on two legs" in the CATL is very flexible and keeps pace with the times. After all, the lithium battery industry is a double-intensive industry of "technology + capital", and product iterative upgrades are fast. On this track, if you are not careful, you will be left behind.

　　In fact, due to the cost advantage of lithium iron phosphate, not only LG New Energy, but also more and more car companies are favoring it. The latest data shows that in terms of vehicle power batteries, the installed capacity of power batteries in China in the first half of this year was 110.1GWh, a year-on-year increase of 109.8%. Among them, the installed capacity of ternary lithium batteries accounted for 41.4%, a year-on-year increase of 51.2%; the installed capacity of lithium iron phosphate batteries accounted for 58.5%, a year-on-year increase of 189.7%.

　　The Chinese market is not a special case. Global car companies are turning to lithium iron phosphate batteries. Recently, CATL announced that it has signed a memorandum of understanding on cooperation with Ford, and will supply the latter with lithium iron phosphate batteries from next year, including China, Europe and North America.

　　It is worth mentioning that the continuous acquisition of lithium iron phosphate orders from global car companies is also an important reason for the continuous increase in the market share of CATL. At present, Tesla's purchase of lithium iron phosphate batteries from CATL has accounted for 19% of its total shipments, and it is the largest customer.

　　The large-scale application of hot-selling models such as Tesla and BYD has promoted the rapid increase in the penetration rate of lithium iron phosphate batteries, gradually surpassing ternary lithium batteries. In the release of the model, lithium iron phosphate batteries will account for 43% of the share; in the field of energy storage, lithium iron phosphate batteries are expected to account for 85% of the share in the future.

　　SES Power believes that LG New Energy's deployment of lithium iron phosphate battery projects is a pragmatic move. In the past two years, the installed capacity of lithium iron phosphate batteries has increased rapidly, and short-distance use is a huge application scenario for new energy vehicles. In pursuit of cruising range, the advantages of ternary lithium batteries are less obvious. Moreover, lithium iron phosphate batteries are safer and can also be used in new energy storage systems, which is also a huge application market.