Leading battery maker LG Chem has been using equipment supplied by Chinese manufacturer Shenzhen Yinghe Tech Co. at its second EV battery-making plant in Nanjing, according to industry sources on June 21.
The Shenzhen-based firm provided winders and notching equipment – 19 sets in twos – used for producing batteries. The two sides signed the deal in September last year, under which all the equipment was installed and ready-for-use by this March.
The sources declined to confirm whether this was the first time LG Chem had such partnerships with the Chinese supplier. They added that it’s rare for equipment makers to go public about who they are supplying.
“Equipment like winders require high precision techniques, which is why it’s not easy finding domestic suppliers,” said one battery industry watcher. “The fact that Yinghe was chosen by LG Chem means it met the standards.”
Yinghe Tech produces, designs, and supplies lithium automated production equipment solutions. Its core competence lies in the key technology involving coating machines, slitting machines, welding machines, winders, die-cutting machines and stacking machines.
Nanjing has become LG Chem’s battery headquarters. EV battery production at its first plant commenced in 2015. It’s also where LG Chem first began to produce small-sized batteries in 2004. In January this year, LG invested 600 billion won ($517.3 million) each in the first EV battery plant and the small-sized battery-making plant.
In October last year, the LG unit broke the ground for the second EV battery plant, vowing to invest 2.1 trillion won by 2023.
LG Chem has been working closely with various vehicle-related suppliers and even finished carmakers in China.
Last year, it established a joint production corporation with Zhejiang Huayou Cobalt, one of the world’s largest cobalt mining companies. This year, it announced the launch of a joint EV battery venture with Geely Auto Group, the largest carmaker in China.
“Any Korean company dealing in the battery business in China, including Samsung SDI and SK Innovation, needs to establish close ties with Chinese suppliers,” said another market watcher.
He projected that the Korean firms may eventually hook up with suppliers of coating equipment, which is considered as the second most challenging machinery in battery manufacturing after winders.