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Lotte Energy Materials Enters Lucrative Tesla Battery Copper Foil Market, Challenging Incumbents

Lotte Energy Materials, a leading developer in the battery industry, has announced its foray into the production of copper foil for 4680 standard cylindrical batteries, colloquially known as “Tesla batteries.” The move will position the company in direct competition with established players Solus Advanced Materials and SK nexilis in the burgeoning next-generation cylindrical battery copper foil market.

Copper foil, which serves as a negative current collector in electric vehicle batteries, is significantly more lucrative than its aluminum counterpart, thanks to copper’s roughly threefold price premium. Historically, copper foil production relied on a rolling method, but since the 2000s, manufacturers have adopted an electrolysis technique involving copper sulfate solution and copper scraps.

Despite challenging global economic conditions, Lotte Energy Materials reported relatively stable sales figures for Q4 of the previous year, posting $129.3 million in sales and $11.4 million in operating profit. This represents a 5.5% decrease in sales and a 33.5% increase in operating profit compared to the same period the year before.

The South Korean company has ambitious plans to develop and manufacture copper foil for 4680 batteries, initially focusing on domestic production. In response to the US Inflation Reduction Act, Lotte Energy Materials is also exploring the establishment of North American production facilities. The official announcement and location specifics are anticipated later this year, with an estimated investment cost of $1.51 billion to $2.27 billion and an initial production capacity of 20,000 tons.

In addition, the company’s Malaysian plant is undergoing expansion, with lines 3 and 4 completed last year and lines 5 and 6 currently under construction. The expansion is projected to raise the plant’s annual copper foil production capacity by 20,000 tons to 60,000 tons. With sites for lines 7 and 8 already secured, Lotte Energy Materials expects its total copper foil output to exceed 90,000 tons post-2025, contingent upon the availability of electricity supply.

The firm has financed the majority of its additional investments and boasts a low debt ratio of just 22%, leaving it well-positioned to raise funds independently as required.

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