LS targets N. America with Mexican EV parts plant

LS Electric said Monday that its electric vehicle parts subsidiary LS e-Mobility Solutions has recently completed the construction of an EV parts manufacturing plant in Durango, Mexico to target the North American electric vehicle market.

The Durango plant, which covers an area of 35,000 square meters, is capable of producing 5 million EV relays and 4 million battery disconnect units per year. As a typical EV can have 20 relays or more, the plant has the capacity to deliver EV relays for up to 250,000 EVs each year. The site’s completion came about 18 months after LS e-Mobility Solutions announced the construction plan in July 2022.

“We expect to see some big results as we quickly and boldly secured a production foothold to target the North America market, the biggest EV market in the world,” said Koo Ja-kyun, CEO of LS Electric, during his visit to the company’s Mexican site.

“As EV investments are considered a must in the era of electrification, LS e-Mobility Solutions will be a pillar of future key businesses by growing into the best EV parts company in North America.”

The Durango site is the first overseas plant built since LS e-Mobility Solutions split off from LS Electric in April 2022. The company said the plant’s location in Northern Mexico gives an advantage in logistics for local deliveries. LS e-Mobility Solutions also operates two production sites -- one in Korea’s Cheongju and the other in China’s Wuxi.

LS e-Mobility Solutions plans to maintain partnerships with major North American automakers such as Ford and Stellantis and invest more in the Durango site to expand the production lines. The company has set the goals to log 700 billion won ($523 million) in North American sales and 1.2 trillion won in global sales in 2030. The global EV relay market is projected to reach 7.3 trillion won in 2030.

According to Kelley Blue Book, a California-based vehicle valuation and automotive research company, a record 1.2 million EVs were sold in the US last year, accounting for 7.6 percent of the total US vehicle market.

The accumulated amount of backlog orders for LS e-Mobility Solutions has surpassed 1 trillion won within a year after the split-off, including a 250 billion won EV relay supply deal with Hyundai Motor Company and Kia signed in August last year.

“In accordance with the North American market’s requirement for establishing local production sites, we became the first Korean company to have constructed an EV parts manufacturing line in Mexico,” said an LS e-Mobility Solutions official.

“We will grow into the best EV parts company in North America by having a world-class product trustiness combined with localization strategies.”