LG Energy Solution vows to double sales, pivot to non-EV businesses

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LG Energy Solution vows to double sales, pivot to non-EV businesses

Published: 07 Oct. 2024, 18:18

SARAH CHEA
chea.sarah@joongang.co.kr

LG Energy Solution CEO Kim Dong-myung speaks during the company's first vision sharing event for employees at its LG Sciencepark R&D complex in western Seoul on Monday. [LG ENERGY SOLUTION]

LG Energy Solution vowed to double its sales by 2028 through shifting its concentration to non-EV businesses like battery management systems (BMS) and air taxis as the EV sales slump lingers in global markets.

"We are more than just a battery manufacturer or seller but will ultimately build an energy ecosystem by providing both products and services as a total energy solution provider," said LG Energy Solution CEO Kim Dong-myung during the company's first vision sharing event for employees at its LG Sciencepark R&D complex in western Seoul on Monday.

"LG Energy Solution will more than double our sales in five years, by 2028, and will become a company that can secure an operating margin of 10 percent excluding the tax credits from the Inflation Reduction Act [IRA]."

Kim also announced his four big strategies for the company's future, which are heavily focused on reducing its profitability dependence on EV battery sales.

LG Energy Solution CEO Kim Dong-myung during the company's first vision sharing event for employees at its LG Sciencepark R&D complex in western Seoul on Monday. [LG ENERGY SOLUTION]

The battery maker will expand its business portfolio to energy storage systems (ESS) and urban air mobility, which is generally called flying taxis. The market for ESS, which can improve grid stability by storing excess energy and releasing it when needed, is growing as demand for electricity rises with the expansion of data centers.

For the EV battery business, LG Energy will focus on affordable options like lithium iron phosphate (LFP) batteries from its traditional high-nickel batteries.

LG Energy will also expand its service business including battery leasing, rentals and recycling, as well as the BMS, whose importance has been skyrocketing over Korean's surging fear of EV fires. A BMS monitors the condition of EV batteries to notify consumers of any fire risks and is considered the most effective method to prevent a blaze.

The company will also constantly invest in next-generation battery technologies such as developing solid-state batteries free of anodes to reduce the cost of production.

"Under our vision of Empower Every Possibility, we are no longer just a battery maker, but an energy company centered on energy circulation," Kim said.

Lately, LG Energy Solution has been losing ground to Chinese players with cheaper battery products. The slowing EV demand has also hit the company hard.

LG Energy became the third largest battery maker in the world, shipping a total of 61.8 gigawatt-hours of batteries this year through August. BYD beat it to the second spot with 83.9 gigawatt-hours while CATL topped the list with 189.2 gigawatt-hours.

BY SARAH CHEA [chea.sarah@joongang.co.kr]