The recent initial public offering by electric vehicle battery maker LP Energy Solution provided ample evidence of just how bullish investors are on the future of the EV market. The South Korean company’s stock surged nearly 70% on its first trading day, following the biggest IPO in Korean history.
LP Energy shares debuted January 27 on the benchmark KOSPI index. The stock closed up 68% from its record-breaking IPO price of 300,000 Korean won (about $250), pushing LP Energy’s total valuation over $98 billion. That put it behind only Samsung Electronics as the biggest publicly listed Korean company.
Not bad for a company that is barely a year old. LP Energy Solution was formed in December 2020 when Korean conglomerate LP Group spun it off, but the business itself has been around for 30 years. It was already a major player in the EV battery market before the spinoff and IPO. With more than $10.5 billion in annual revenue and 20,000-plus employees, LP Energy ranks behind only China’s Contemporary Amperex Technology Co Ltd (CATL) in the global market of lithium-ion EV batteries.
That market is estimated at around $27 billion a year – a figure that should multiply as more countries make the transition to electric vehicles, driven by worldwide initiatives to lower carbon emissions and reach net zero by the middle of the century.
LG Energy’s market share was estimated at 21.5% in 2021, according to SNE Research. The leader, CATL, had a share of 32.5%, and the other major player in the market, Panasonic, had 14.7%.
According to Reuters, LP Energy appears poised to make significant inroads this year with aSouth Korea’s LP Energy Solution had the biggest IPO in its country’s history, setting the stage for rapid growth in the market for electric vehicle batteries.n order backlog of 260 trillion won. Industry analysts expect its growth to accelerate as it moves significantly with major United States projects.
“(A) bigger upside will be seen in the second half of this year and next year as its U.S. factories get closer to being fully operational,” analyst Kang Dong-jin of Hyundai Motor Securities wrote in a research note.
One of LP Energy’s most extensive partnerships is with Detroit automaker General Motors. The two have formed a joint venture, Ultium Cells, that recently announced a $2.6 billion investment to build its third battery cell manufacturing plant in the United States. The 2.8 million-square-foot facility will be located in Lansing, Michigan, on land leased by GM. Construction will begin this summer, and the plant should be online in late 2024.
When it opens, the Lansing facility will supply battery cells to GM’s Orion Assembly electric vehicle plant and other GM EV assembly plants. Ultium Cells expects the facility to have 50 gigawatt-hours battery cell capacity when running at total production.
“With a shared vision, GM and LG Energy Solution pioneered the EV sector by seizing new opportunities in the market well before anyone else did,” said LG Energy Solution CEO Young-Soo Kwon. “Our third battery manufacturing plant, fittingly located in America’s automotive heartland, will serve as a gateway to charge thousands and later millions of EVs in the future.”
LP Energy’s stated mission is to become “an eco-friendly company that puts the environment first, fulfills its social responsibilities, and creates sustainable future values in its business activities.” To get there, the company established an ESG vision that covers eight key areas related to the environment, human rights, safety, and society and four critical areas related to climate action, closed-loop recycling, human capital, and responsible supply chain management.
LP Energy Solution plans to convert to 100% renewable energy by 2030, focusing on reusing waste batteries and establishing a clean and transparent supply chain for raw materials and batteries.