SEOUL, June 16, 2025
LG Energy Solution Charges into ChinaS EV Market
Korean battery giant LG Energy Solution has inked a deal to supply 46-series cylindrical batteries to Chinese automaker Cherry Motors.
- LG Energy Solution signed a major battery supply deal with Cherry Motors.
- The deal involves 8 GWh of 46-series cylindrical batteries, enough for roughly 120,000 electric cars.
- This marks a strategic shift toward the Chinese market for the South Korean battery maker.
Is LG Energy Solution making a bold move? On June 16, LG Energy Solution announced a six-year contract with Cherry Motors to supply 46-series cylindrical batteries to the tune of 8 GWh, marking a notable expansion into the world’s largest electric vehicle market. This strategic play could be worth at least 1 trillion won, according to industry estimates.
The 46 series battery exhibited at the ‘Inter Battery 2025’ LG Energy Solution Booth held at COEX in March. Yonhap News
A Strategic Shift
This marks the first time a South Korean battery manufacturer has secured such a large-scale cylindrical battery supply deal with a Chinese automaker. Cherry Motors, a state-owned company established in 1997, has a diverse portfolio of brands including internal combustion engine, hybrid, and pure electric vehicles.
reader question:-How will this deal affect the competitive landscape for EV batteries in China,and what challenges might LG Energy Solution face in establishing a strong foothold?
LG Energy Solution plans to begin supplying batteries early next year. The two companies have already agreed to explore additional projects in the future. The move signals a pivot for South Korean battery companies, which have been heavily focused on the North American market.
Did you know? The 46-series battery boasts a diameter of 46mm and a height ranging from 80 to 120mm, delivering five times the output of the 2170 battery.
The Chinese electric vehicle market is notoriously challenging for foreign battery companies, often referred to as a “Cheolongseong” or “iron fortress.” This is largely due to the dominance of domestic players like CATL and BYD,which recieve strong support from the Chinese government.
Did you know?-The term “Cheolongseong,” meaning “iron fortress,” reflects the significant barriers to entry and intense competition within the Chinese EV market for foreign companies.
Last month, CATL held 42.9% of China’s electric vehicle battery market share, BYD held 22.5%, and CALB held 7.5%, accounting for over 95% of the market.
Why china?
The 46-series battery offers advantages over China’s lithium phosphate (LFP) batteries, especially in terms of driving range and performance in colder temperatures.These batteries also boast higher price competitiveness due to reduced production costs and time.
Industry observers see this contract as a strategic move for both companies. In China, automakers face oversupply challenges, and finished car manufacturers are navigating a “profit cliff.” With the US government’s policy, product differentiation and cost reduction are becoming top priorities.LG Energy Solution also needs to diversify it’s order portfolio.
An industry official noted, “It is indeed highly likely that only minority companies that caught two rabbits of cost savings and quality among electric cars and battery companies are likely to survive after the creation of cost savings and quality.”
The Competitive Edge: 46-Series vs. LFP
While the deal with Cherry Motors is a meaningful win for LG Energy Solution, understanding the nuances of the Chinese EV battery landscape is crucial. the company’s 46-series cylindrical batteries are positioned to compete directly with the dominant Lithium Iron Phosphate (LFP) batteries favored by Chinese manufacturers like CATL and BYD.
What advantages do 46-series batteries offer? 46-series batteries, like those LGES will supply, offer better energy density and performance in cold weather compared to LFP batteries. This means a possibly longer driving range for electric vehicles, a key selling point in a competitive market.
The choice between battery chemistries is critical for automakers. LFP batteries are generally cheaper to produce, which can translate to lower vehicle costs. Though, they frequently enough have a lower energy density, meaning the car may have a shorter range.The 46-series batteries provide a compelling alternative, balancing performance and cost.
What are the key differences between 46-series and LFP batteries? 46-series batteries use a nickel-rich cathode, which provides higher energy density. LFP batteries, conversely, use iron and phosphate, which are less expensive but offer lower energy density. 46-series batteries often perform better in colder temperatures, a significant factor for buyers in many regions of China.
Pro Tip: automakers are constantly evaluating the trade-offs between battery range, cost, and performance. The best choice of battery depends on the vehicle’s target market and price point.
Challenges and Opportunities in China
Breaking into the Chinese EV market is not easy, as the article mentions, “Cheolongseong,” can be an apt description.Domestic companies such as CATL and BYD, have a stronghold, backed by government support and established supply chains. LG Energy Solution will need to build strong relationships and prove the value of its 46-series batteries to be accomplished.
How does LG Energy Solution plan to overcome thes challenges? the company’s partnership with Cherry Motors is a step one, it signals a strategic shift. The automaker is also likely leveraging the advantages of its 46-series batteries, offering a compelling alternative to LFP options.
LG Energy Solution, as the article touched on, is also aiming to meet the needs of China’s ambitious EV market, where vehicle oversupply and price competition are intense.Its new cylindrical battery format can help manufacturers offer differentiating product lines. Moreover, it requires robust manufacturing capabilities and a consistent supply chain to avoid supply disruption.
What are the potential risks for LG Energy Solution in China? The Chinese market is subject to rapid change and regulatory shifts, and the company faces intense competition from domestic suppliers, making it vulnerable to evolving government policies, which could favor local manufacturers.
LG Energy Solution must also contend with geopolitical tensions. Trade disputes and supply chain disruptions pose additional risks. To mitigate these risks, the company invests in localization, forming partnerships with the Chinese automakers to reduce supply chain dependencies.
The Future of EV Batteries
The LG Energy Solution-Cherry Motors partnership is one example of the evolving global EV landscape. The demand for high-performance, cost-effective batteries continues to grow. The 46-series battery, with its high energy density, could become a preferred option.
What does this deal meen for the EV battery market? This deal signals the continued global expansion of South Korean battery makers focusing on high-end technology, which could influence how the leading Chinese manufacturers respond.
LG Energy Solution’s success in China depends on more than just the batteries. Their long-term vision includes strategic partnerships, robust manufacturing capabilities, and adapting to the ever-changing Chinese market. If they can overcome these challenges, it paves the way to a promising future.
Can LG Energy Solution succeed in China? Given this strategy to focus on the high technology of the batteries, and the increasing adoption of electric vehicles, there’s optimism. The fact that the company’s batteries offer advantages not found in China’s dominant cheap Lithium Iron Phosphate format could lead to market share.
Frequently Asked Questions
Q: Why is the 46-series battery considered innovative?
A: The 46-series batteries increase driving range and perform well in cold weather, and have a reduced production time.
Q: How does the Chinese government influence the EV battery market?
A: The Chinese government is highly influential because it provides substantial support to domestic companies like CATL and BYD.
Q: What are the main benefits of the 46-series batteries?
A: These batteries have greater output, and deliver five times the output of the 2170 battery.
Q: What are the biggest challenges LG Energy Solution could face in China?
A: Foreign companies in China are competing with the Chinese government, and its domestic battery manufactures.
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