When Apple sneezes, LG Electronics gets an EV cold

An anticipated concept image of the Apple Car [MACRUMORS]

 
LG Electronics bet the farm on auto electronics and EV components and it has paid the price, especially as a possible Apple Car goes in and out of the news.
 
Since early 2021, the Korean company has been focusing heavily on auto components and auto chips. It abandoned the manufacturing of phones and solar panels and has been scrambling for growth opportunities.  
 
LG Electronics has invested 431.5 billion won ($331 million) this year through the end of the third quarter in its Vehicle Component Solutions division.
 
The company’s EV-components push has led to reports, all unconfirmed, that LG Electronics may be working to become a supplier for the Apple EV car project.  
 
The Korean electronics maker declined to confirm its involvement in the car project, but the market has made some sort of connection.  
 

 
Its stock prices plunged 7.1 percent on Dec. 7 following a Bloomberg report that Apple will delay the debut of the Apple Car to 2026 and scale back autonomous driving functions.
 
Shares of LG Electronics are down 35 percent so far this year and are down almost 50 percent since hitting a recent high in early 2021, about when the company started its push toward automotive components. It has underperformed the indexes and most of its competitors.
 
The company tends to do well when news emerges about even the most tenuous of connections to the Apple Car. On March 30, 2021, the share price of LG Electronics jumped 8.19 percent when Magna International CEO Swamy Kotagiri said the company is ready to produce Apple Cars.
 
LG Electronics has a $1 billion joint venture with the Canadian company. LG Magna e-Powertrain, the venture, produces motors, inverters and onboard chargers for EVs. The EV parts division of LG Electronics was spun off and absorbed by the venture.
 
When the deal with Magna International was announced on Dec. 23, 2020, the share price of LG Electronics jumped by 29.61 percent.
 
Hope remains.
 
“Being caught in the geopolitical crossfire among the United States, Taiwan and China, Apple will actively tap Korean parts suppliers and their supply chains that have a proven track record in the market,” said Kim Dong-won, an analyst at KB Securities.  
 
“Therefore it is highly likely that Apple will sign a strategic partnership with LG since LG companies have a full lineup – from EV components to manufacturing capabilities for hardware,” Kim said, mentioning LG Energy Solution for batteries, LG Electronics for contract manufacturing and motors, LG Innotek for cameras and radars and LG Display for organic light-emitting diode (OLED) panels.  
 
Kim projected that Apple will start establishing a network of parts suppliers in 2023 to make an Apple Car available in 2026.  
 
“Apple typically embarks on a formal development process two years ahead of target release year for its mobile devices,” he said, “But given that automobile is a new business and requires high standards of safety, the formal process that decides design, production and parts partners will likely begin in 2023.”
 
LG Electronics and Apple would be a good team, argues Kim Jin-woo, an analyst at Korea Investment & Securities.  
 
“European car makers like BMW, Mercedes Benz and Jaguar have had Magna manufacture their cars,” Kim said, “Considering the relation between Magna, LG Electronics and Apple, the LG-Magna joint venture could work together with Apple for Apple Car.”
 
Foxconn, a major contract manufacturer of iPhones, has expressed auto ambitions of its own, producing its own EVs with other carmakers.  
 
LG Electronics contract-manufactured Apple’s iMac PC monitors in the late 1990.  
 
LG Innotek, 40.79 percent owned by LG Electronics, is one of main suppliers of camera modules for iPhones.
 
Innotek has increased the range of automotive products it makes to include cameras, radars and modules for telecommunications and power supplies.  
 
LG Display, a panel maker 37.9 percent owned by the electronics maker, has produced OLED panels for iPhones and liquid crystal displays for MacBooks. 
 
LG Display has been pushing display development for mixed reality devices. Vice president Yang Joon-young said that the company has completed the development of OLED on silicon, or OLEDoS, that meets specifications published by “Silicon Valley” clients in a forum last month, although he didn’t specify the names.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]