Source to LG Energy Solution, LG Energy Solution, and Toyota Motor North America, Inc. (Toyota) today announced that they have signed a supply agreement for lithium-ion battery modules to be used in Toyota battery electric vehicles (BEVs) that will be assembled in the United States.

Under the contract, LG Energy Solution will supply automotive battery modules at an annual capacity of 20GWh starting from 2025. The battery modules, consisting of high-nickel NCMA (nickel, cobalt, manganese, aluminum) pouch-type cells, will be manufactured in LG Energy Solution’s Michigan facility.

The innovative power solutions will support Toyota’s expanding line of BEVs, part of its multi-pathway product strategy, including a new BEV model that will be assembled at Toyota Motor Manufacturing Kentucky in 2025. They will also help further Toyota’s vehicle electrification initiatives, as it aspires to offer 30 BEV models globally across its Toyota and Lexus brand nameplates and produce up to 3.5 million BEVs annually by 2030.

“At Toyota, our goal is to reduce carbon emissions as much as possible, as fast as possible,” said Tetsuo “Ted” Ogawa, president and CEO of Toyota Motor North America. “Having secure supplies of lithium-ion batteries at scale with a long-term relationship to support Toyota’s multi-pathway approach and growth plans for BEVs in North America is critical to achieving our manufacturing and carbon reduction plans. Working with LG Energy Solution, we are excited to be able to offer products that will provide the performance and quality our customers expect.”

To fulfill the supply agreement, LG Energy Solution will invest KRW 4 trillion (approximately USD 3 billion) in its Michigan facility to establish new production lines for battery cells and modules exclusively for Toyota, with completion slated for 2025. Initially, the battery modules will go to Toyota Motor Manufacturing Kentucky to be assembled into battery packs and equipped onto BEVs.

The agreement brings together LG Energy Solution’s proven capabilities in manufacturing top-quality battery cells and modules at scale, and Toyota’s advanced technologies in battery packs to create a product using LG Energy Solution’s innovative power solution which optimizes battery system performance, providing peace of mind and further enhancing the BEV customer experience. LG Energy Solution continues to enhance battery safety, including with respect to its thermal management for its high-nickel NCMA batteries.

“We’re excited to have Toyota, the best-selling global automaker, as our new customer. With our 30 years of experience in lithium-ion batteries, we will provide innovative power solutions to support Toyota’s push further into battery electric vehicles,” said Youngsoo Kwon, CEO of LG Energy Solution. “The agreement also presents another big opportunity for us to strengthen our production capacity in North America, thereby bringing more real-life, large-scale progress toward electrification in the region.”

The landmark deal represents LG Energy Solution’s largest single supply agreement secured outside of joint venture agreements. The company now supplies its batteries to all the top five global automakers^[1]. Based on its market leadership, the company has eight battery manufacturing facilities currently operating or under construction in North America and continues to expand both its production network and supply chain in the region. (Image credit: LG)

On September 15, 2023, Chinese automaker NIO announced the launch of the new generation EC6, marking a generational shift from its predecessor. The all-new EC6 is built on NIO’s nt2.0 platform and represents the final model to be introduced on this platform.

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According to a report by China’s Jiwei, Huawei is said to be assembling a team focused on commodities trading and hedging of metal and energy commodity products.

Posts on the professional networking platform LinkedIn revealed that a month ago, Huawei was actively recruiting for positions such as a commodities trader and a commodities market analyst in Singapore. Currently, these job postings are no longer accepting applications. Additionally, other LinkedIn posts indicated that Huawei had recruited a metal commodity hedging expert and a metal research specialist in Singapore four months prior.

Reportedly, these positions will collaborate closely with Huawei’s teams in China and Hong Kong to bolster their capabilities in metal commodity hedging, research, and risk management, with a particular focus on ferrous metals, non-ferrous metals, and battery metals.

An industry source revealed that Huawei initiated the formation of this team earlier this year, currently consisting of five members, and might recruit up to four additional employees in the commodities and financial trading centers of Singapore and Hong Kong. The team’s objective is to hedge Huawei’s risk exposure in the raw materials sector, including precious metals, ferrous metals, energy, and lithium products. Presently, the team is in the process of drafting hedging recommendations and trading plans.

Source to China Times, LCE prices in China have persistently declined, with the average price for battery-grade LCE on the 26th standing at CNY 178,500 per ton (CNY is used throughout, same as above), marking a decrease of CNY 2,000 compared to the previous day. Prices remain below the significant threshold of CNY 200,000 per ton, extending the weakness observed since September. The market suggested that the profit distribution pattern within the industry chain has shifted noticeably from upstream to downstream.

Based on TrendForce’s research, the sluggish demand in the consumer electronics segment in August forced battery cell suppliers to focus on liquidating existing inventories. TrendForce indicates that the ongoing drop in the prices of lithium salts and cobalt [II, III] oxide shows no signs of bottoming out. Manufacturers, therefore, seem hesitant to stock up, opting for a “business as usual” approach to production. A downward trajectory of LCO battery prices seems likely through September. 

Weak demand in both the power and energy storage sectors has put pressure on lithium salt prices, which spiraled down to an average of CNY 230,000/ton in August—a steep QoQ dive of 20%. TrendForce warns that prices may plunge to less than CNY 200,000/ton, making buyers increasingly skittish about making purchases. However, there’s a glimmer of hope: suppliers have initiated production cutbacks, providing a potential floor for lithium salt prices to rebound from as we approach September.

According to TMTPOST, as lithium salt is an upstream component of the lithium battery industry chain, fluctuations in its prices affect the profitability landscape of the entire chain. With the sharp decline in lithium salt prices, the profit margins of lithium salt producers have been notably compressed. Taking the industry leader, Tianqi Lithium, as an example, its revenue for 1H23 increased by 73.64% to CNY 24.823 billion, but its net profit decreased sharply by 37.52% to CNY 6.452 billion. The key driver behind this decline in performance is the fall in lithium prices, which resulted in an 8.9 percentage point year-on-year decrease in the company’s gross profit margin for lithium compounds and derivative products, dropping to 78.64%.

Investors pointed out that as upstream lithium prices decrease, the prices of lithium battery raw materials such as LFP will also correspondingly decrease, thereby reducing the cost of lithium batteries. For automakers, this translates into lower production costs and improved profit margins.

The decline in lithium raw material prices has led to improved profitability for battery manufacturers and automakers. Taking CATL as an example, the revenue growth rate of its power battery systems for 1H23 exceeded the cost growth rate, resulting in a gross profit margin of 20.35%, an increase of 5.31 percentage points year-on-year. (Image credit: Tianqi Lithium)

(Source: https://www.ctee.com.tw/news/20230927700163-439901)

Leveraging the superior conversion efficiency of N-type cells, the rise of cost-effective TOPCon cell technology in 2022 has seen N-type cell technology rapidly expand, inviting many solar industry participants into the competition. Currently, PERC cell technology (for producing P-type cells) stands as the market’s mainstay. However, with the step-by-step realization of large-scale N-type cell capacities, there looms a risk that a substantial part of PERC cell technology capacities may be phased out within the forthcoming two to three years. Concurrently, based on TrendForce’s analysis, as N-type cell capacities incrementally come online, there might be a sporadic shortage of high-quality silicon materials and wafers tailored for N-type cells. This could further establish a noticeable price disparity between N-type silicon and wafers, and their P-type counterparts.

Silicon supply remains abundant, but the price gap between P-type and N-type continues to widen

By 2023’s end, it is projected that the total production capacity of polysilicon will reach 2.072 million tons, an increase of 68.6% YoY. The actual output of silicon materials is expected to be about 1.483 million tons, sufficient to support over 600 GW of solar panel consumption (given a silicon consumption rate of 0.245 tons/GW). This aligns with an annual installation demand of approximately 370-390 GW, indicating a clear oversupply of silicon. As the market leans towards N-type cell technology, P-type silicon may face oversupply, causing its price to drop faster. Conversely, robust demand and limited output for N-type silicon might create periodic shortages, stabilizing its price. For silicon firms, N-type silicon offers better profitability.

Surging demand for N-type cell slices drives silicon wafer makers to swiftly pivot

By the end of 2023, silicon wafer production capacity is projected to reach approximately 921.6 GW, reflecting a 64.2% year-on-year growth. Driven by the increasing demand for N-type cell wafers, silicon wafer manufacturers are rapidly transitioning to N-type production and ramping up their output. With the inclusion of rectangular silicon wafers occupying a portion of this capacity, certain dimensions of P-type wafers might experience short-term supply shortages, potentially failing to meet immediate demands. If the N-type cell rollout falls short of expectations, there remains a risk of N-type wafer oversupply. Additionally, amid intensified industry competition and considering factors such as technological prowess, availability of high-purity quartz sand, and consistent supply of top-quality silicon wafers, leading companies like Longi and CMC are set to further elevate their competitive edge.

N-cell capacity deployment sees delays; PERC tech likely to remain dominant this year

The projected total wafer capacity by 2023’s end is estimated to reach around 1,172 GW, marking a 106% increase year-on-year. The majority of this newly added capacity is attributed to N-type TOPCon cell technology. By the end of the year, N-type wafer capacity is expected to reach 676 GW, accounting for 57.7% of the total. However, TrendForce has observed some delays in the actual deployment of N-type cell capacity. Given the existing price difference between N-P type wafers, PERC technology is anticipated to retain its leading position in the market this year, although the penetration rate of TOPCon cells will accelerate.

China expected to hold 80–85% of global solar panel capacity in 2023

Estimations for 2023 indicate that the worldwide solar panel capacity could reach an astounding 1,034 GW, marking a 64.7% increase year-on-year. Of this, approximately 335.4 GW represents newly added capacity, predominantly driven by Chinese enterprises. With Western countries and India progressively launching policies supporting local manufacturing, a growing number of Chinese firms are contemplating setting up production capacities overseas to sidestep trade barriers. TrendForce reports leading Chinese solar panel manufacturers like Longi, JinkoSolar, JA Solar, and TrinaSolar have successively expanded their operations to areas including the US, Europe, and the Middle East. Given the matured technology and cost-effective production of Chinese manufacturers and considering the nascent state of the solar supply chains overseas and the elevated costs of expansion, it remains challenging for enterprises from other regions to join the competition. As such, TrendForce believes that the global competitive landscape for solar panels won’t see any marked changes in the near term, maintaining China’s dominant position with an anticipated 80-85% capacity share in 2023.