Freudenberg signs battery module supply deal with LG ES

Freudenberg e-Power Systems (FEPS) and LG Energy Solution (LGES) have signed a multi-year contract to supply lithium-ion battery modules. This is Freudenberg’s response to increasing demand from its truck and bus customers in North America and Europe.

According to Freudenberg e-Power Systems – the Group Division that has been bundling Freudenberg’s battery and fuel cell systems activities since April 2022 – an agreement has been reached with LGES to supply 19 GWh of lithium-ion battery cell modules for truck and bus applications. The partners do not specify how this volume will be distributed over the “multi-year” contract period. There is also no information on the timing of the delivery start and the order value.

What is clear is that the modules supplied will be integrated by Freudenberg e-Power Systems into its battery packs. These in turn will become part of Freudenberg’s drive solutions including battery management, cooling, telematics and other relevant elements. FEPS emphasizes that the battery modules ordered from LGES are “particularly suitable for use in commercial vehicles due to their properties.” The background to this is that batteries for commercial vehicles have to withstand a significantly higher energy throughput.

Incidentally, the modules will be supplied by LGES to the USA. They are integrated into the company’s packs in Midland in the US state of Michigan. FEPS operates a battery factory there, the so-called XALT Gigafactory. The background to this is that Freudenberg acquired the remaining stake in US battery specialist XALT Energy in January. Freudenberg previously held a 50.1 per cent stake in the battery manufacturer, and a few weeks ago the Group acquired the remaining 49.9 per cent of the joint venture from partner MBP Investors. With the full takeover, Freudenberg e-Power Systems says it is investing “a further double-digit million amount in the expansion of its battery business and capacities”.

Incidentally, in the announcement of the full buyout of the joint venture in January, FEPS described XALT not only as a manufacturer of fully integrated battery packs, but also as a developer and producer of battery cells for the commercial vehicle and marine industries. “The acquisition of the ownership interest underscores Freudenberg’s long-term strategy of investing in electro-mobility applications, focusing on battery and fuel cell technology,” FEPS wrote in somewhat general terms. XALT Energy employed some 550 people in Midland and Auburn Hills in the US state of Michigan at the time of the complete takeover by Freudenberg.

LG Energy Solutions says that it has already expanded its battery business into the commercial vehicle sector. The partnership with Freudenberg is intended to drive forward the commercial vehicle battery business in North America and Europe, according to the company’s headquarters. Dong-Myung Kim, president of LG Energy Solution’s Advanced Automotive Battery Division, put it this way: “The acquisition of the ownership interest underscores Freudenberg’s long-term
strategy of investing in electro-mobility applications, focusing on battery and fuel cell technology
. Together with Freudenberg, we will endeavor to create unparalleled customer value through differentiated capabilities accumulated across the entire battery-related field, such as battery cells, modules, packs, and BMS.”

For Dr Max Kley, CEO of Freudenberg e-Power Systems, the partnership with LG Energy Solution strengthens Freudenberg’s “leading battery offering for the bus and truck market”. “Together we are able to offer our customers an unparalleled range of solutions specifically tailored to the demanding requirements of this market.” FEPS will become LGES’ preferred partner in this segment, he added. In this context, the long-term contract with LGES underlines the strategic importance and growth potential Freudenberg sees in its e-mobility solutions.

The Freudenberg Group understands this to mean both battery and fuel cell solutions for the heavy-duty sector. The latter focus is manifested, among other things, in a cooperation with supplier ZF. In September 2022, the duo agreed to jointly develop fuel cell-battery drive systems for heavy commercial vehicles. The first prototypes are to be tested on the roads as early as this year.

The division within the cooperation is clear: Freudenberg provides modular fuel cell and battery kits with application-specific performance. ZF contributes the complete electric driveline (including inverters, converters, compressors and software for energy management systems) with up to 360 kW continuous power. The technical basis is CeTrax 2, the recently presented next generation of the electric central drive for heavy commercial vehicles., (acquisition)


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