Hanwha, LG Energy team up for US battery production

South Korea’s Hanwha Group will invest in LG Energy Solution Ltd.'s battery production lines for energy storage systems (ESS) in the US, some of which will be supplied to Hanwha’s ESS facilities.

Three Hanwha Group units, including Hanwha Solutions Corp., and LG Energy signed a memorandum of understanding on Monday to form a broad-based strategic partnership as the two work to expand their footprints in the US renewable energy market, both companies said.

They have not yet disclosed how much Hanwha will put into LG’s US facilities.

LG Energy has been increasing its production capacity in North America, jointly with General Motors Co., Honda Motor Co. and Stellantis NV.

LG is also planning to boost its production in other locations such as Poland and Michigan, as well as further production in South Korea.

Its partnership with Hanwha will help the world's No. 2 battery producer secure a long-term customer in the US, while beefing up its three-pronged business portfolio of automotive, small-size and ESS batteries, said LG Energy.

LG and Hanwha will jointly develop components and systems embedded in batteries for ESS. 

Hanwha Momentum, a machinery supplier, will provide equipment and automation engineering systems to LG Energy’s domestic and overseas plants.

Last week, Hanwha Solutions, a solar panel manufacturer, announced that it would invest $3.2 billion to build the largest solar energy production hub in the US by next year.

The latest investment is an aim to better cope with the US Inflation Reduction Act that includes tax credit provisions for clean energy production.

The partnership with LG will help Hanwha Q Cells Co., a US subsidiary of Hanwha Solutions, secure batteries for ESS products on a steady basis.

ESS has been in growing demand to improve the stability of power grids and their management efficiency, in line with an expansion in the renewable energy market. 

The ESS market in the US is forecast to grow by more than nine times to 95 gigawatt-per-hour (GWh) by 2031, compared to 9 GWh in 2021, fueled by the US Inflation Reduction Act. 

Both Hanwha and LG Energy will also expand their strategic cooperation into the urban air mobility (UAM) market. 

Hanwha Aerospace, an aircraft manufacturer, will work together with LG to develop special-purpose batteries for UAM services.

“We will cooperate with LG Energy in various areas from battery manufacturing to special-purpose battery development and maximize synergy,” said a Hanwha official.

Write to Jae-Fu Kim at hu@hankyung.com
Yeonhee Kim edited this article.