One of the World's Biggest EV Battery Companies Is Going Public. Be Careful – Bloomberg
LG Energy Solution has all the trappings of the perfect investment. Look a little closer and there’s reason for skepticism.
Good things come in small packages?
One of the biggest electric-vehicle battery companies in the world is going public. South Korea’s LG Energy Solution, which makes powerpacks for the likes of General Motors Co., is looking to raise up to almost $11 billion in a listing that could value the company at close to $60 billion. Big, bold and promising as that is, investors need to look carefully.
For deep-pocketed money managers, especially those hoping to fulfill their ESG mandates, the LG Energy initial public offering has all the trappings of the perfect investment. It’s backed by one of South Korea’s well-established, chemical-to-electronics conglomerates, which guarantees its place in a supply chain-crunched world. It has a long-list of captive customers (mostly carmakers), a huge order backlog, and most importantly, the battery technology. LG Energy has a grip on over a fifth of the global market by production capacity, just behind Chinese battery behemoth Contemporary Amperex Technology Co., or CATL.
