LG Energy Reports Third Quarter Financial Results and Reveals Strategies for Product Competitiveness

By Editor


LG Energy Solution, a player in the energy storage and EV battery industry, has announced its financial results for the third quarter of the year, along with strategic plans to enhance product competitiveness amidst a challenging global market.

LG Energy Solution recorded total revenue of KRW 8.22 trillion in the third quarter of 2023. While this represented a 6.3 percent decrease quarter-on-quarter, it marked a notable 7.5 percent increase year-on-year. The company’s operating profit for the same period was KRW 731.2 billion, reflecting a remarkable 58.7 percent surge quarter-on-quarter and a substantial 40.1 percent increase year-on-year.

These figures include an estimated IRA tax credit amount of KRW 215.5 billion, which soared by an impressive 94 percent compared to the previous quarter. This boost was primarily driven by enhanced production and sales from newly ramped-up capacity in the United States. Excluding the estimated IRA tax credit effect, the operating profit for the quarter stood at KRW 515.7 billion with a margin of 6.3 percent.

Chang Sil Lee, CFO of LG Energy Solution, in its earnings report has attributed the decline in quarterly revenue to factors including a demand slowdown in Europe, production adjustments in the electric vehicle (EV) industry by original equipment manufacturers (OEMs), and fluctuations in metal prices affecting average selling prices (ASPs).

However, he highlighted the positive increase in operating profit, which was achieved through a combination of product mix improvements, increased productivity from new production lines, and cost-efficiency efforts.

Strategies to Enhance Product Competitiveness

LG Energy Solution has outlined strategic initiatives to bolster its product competitiveness. These include:

Enhanced Safety and Performance: In the premium EV segment, LG Energy Solution will improve thermal management technology through design optimization and develop module and pack cooling systems to enhance product safety.

Higher Energy Density: The company aims to increase the proportion of nickel to over 90 percent in its high-nickel NCMA batteries while achieving fast-charging times of under 15 minutes by adopting high-capacity, high-efficiency silicon anodes.

Supply Expansion: LG Energy Solution plans to expand supply support to meet OEMs’ demands for premium EVs. This includes a recent 10-year supply agreement (20GWh/year) with Toyota for high-nickel NCMA pouch-type cells.

Product Portfolio Diversification: The company will strengthen its product portfolio for mid- to low-end EV segments, including high-voltage mid-nickel NCM batteries with cost advantages, manganese-rich batteries, and LFP / LMFP batteries.

Arizona Facility Expansion

LG Energy Solution has made strategic decisions regarding its battery production facilities, focusing on its Arizona battery facility. This location will become the key production hub for 46-Series cylindrical batteries in North America.

The facility’s annual production capacity for 46-Series batteries will be expanded to 36GWh, with production scheduled to begin in late 2025, despite the original plan to produce 2170 cells at an annual capacity of 27GWh.

Additionally, LG Energy Solution will establish a pilot production line for 46-Series cylindrical batteries in Ochang, Korea, with production expected to commence in the second half of 2024. The Nanjing facility in China will serve as the primary production hub for 2170 cylindrical batteries, catering to market demands in China and Europe, and diversifying production for light electric vehicles (LEV).

LG Energy Solution’s strategic focus on innovation, safety, and product competitiveness underscores the company’s commitment to meeting the evolving needs of the global energy and EV market.

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