Lagos — South Korean company LG Energy’s launch of a record-breaking IPO could untie Western reliance on Chinese batteries by filling the US and EU battery production void.
Daniel Clarke, an Analyst on the Thematic Research Team at GlobalData made the disclosure while commenting on the LG Energy IPO.
“LG Energy’s initial public offering (IPO) has come at a perfect time. With US-China tensions remaining high, and Western governments and automakers waking up to the fact that reliance on Chinese batteries might leave them geopolitically exposed, South Korea’s LG Energy is seen as the perfect alternative to fill the US and EU’s battery production void.
“This is a seminal moment for the battery sector. LG Energy will use these funds to scale-up global production and joint ventures, which will in turn drive electric vehicle (EV) adoption in the future
“LG Energy has a very diversified list of customers, including Tesla, Ford and Volkswagen. This leaves it in a strong position verses Chinese market leader CATL. Even though CATL has a higher market share, a better operating margin, and cheaper production costs, geopolitical tensions mean that LG Energy has a much greater potential to expand globally and increase deals with Western automakers. This has also been recognized by LG Energy’s investors. Institutional and retail investors both recognize that batteries are the key to a decarbonized future, and very few have looked past LG Energy,” he disclosed.
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