South Korea-owned LG Energy Solution, which currently stands as the world’s second-largest electric vehicle battery maker after China’s Contemporary Amperex Technology (CATL), is looking to raise $11 billion as part of its efforts to play a larger role in the electric vehicle battery market. LG Energy Solution currently supplies batteries for companies such as Tesla, Volkswagen, and General Motors.
CATL currently stands as the world’s largest battery maker, with the company currently being valued at about $196 billion. As noted in a Financial Times report, LG Energy Solution would be offering 34 million shares in the range of ₩257,000-₩300,000 (about $214 to $249) per share. If the company could hit the top of its price range, the South Korean battery maker would have a market value of ₩70.2 trillion, or about $59.4 billion.
With a potential market cap of $59.4 billion, LG Energy Solution could effectively become South Korea’s third-most valuable company after Samsung Electronics and SK Hynix. During an online news conference on Monday, chief executive Kwon Young-soo noted that LG Energy Solution has a lot of potential in markets outside China.
The executive highlighted that even if CATL is currently the world’s largest EV battery maker, its growth has been mostly backed by China-based automakers. LG’s growth, however, is not. “We have a wider range of customers not only limited in China, but also in the United States as well as in Europe, while CATL’s growth has been mostly backed by Chinese automakers,” Kwon said.
While LG Energy Solution may be on track to become one of South Korea’s largest companies by market cap, analysts have noted that the company may still be underrated. This was because LG controls about 20.5% of the global electric vehicle battery market. CATL, which is worth $196 billion, currently controls 31.8% of the worldwide battery segment, as per data from SNE Research. LG’s potential was summarized by Bernstein analysts in a report on Monday.
“We believe the company is well-positioned to be the leading battery maker outside of China, but investors will have to weigh up recall risks and increased competition from LFP [lithium-iron-phosphate] in the short term,” the analysts noted.