LG Energy Solution Ltd. (LGES), South Korea’s leading battery maker, said Monday it aims to more than double sales by 2028 by expanding its non-EV business amid the slowdown of electric vehicles.
LGES announced its business diversification plans in the company’s first vision sharing event for employees at its LG Sciencepark R and D complex in western Seoul.
The announcement comes as carmakers and battery providers struggle with slowing sales due to the EV chasm, which occurs before the widespread adoption of pure electric cars.
Under the vision of “Empower Every Possibility,” LGES will expand businesses involving the energy storage system (ESS), urban air mobility (UAM), Battery-as-a-Service (BaaS) and Energy-as-a-Service (EaaS), the company said in a statement.
This photo taken on Oct. 7, 2024, and provided by LG Energy Solution Ltd. shows the company’s CEO Kim Dong-myung announcing its business diversification plan at LG Sciencepark R and D complex at Magok, western Seoul. (PHOTO NOT FOR SALE) (Yonhap)
This photo taken on Oct. 7, 2024, and provided by LG Energy Solution Ltd. shows the company’s CEO Kim Dong-myung announcing its business diversification plan at LG Sciencepark R and D complex at Magok, western Seoul. (PHOTO NOT FOR SALE) (Yonhap)
“We are targeting to morph into an energy solutions provider with focus on ‘energy cycle,’ not just staying as a battery manufacturer,” said LGES Chief Executive Kim Dong-myung. “Ultimately, we’ll build an energy ecosystem.”
The battery maker also aims to achieve a mid-10 percent margin in earnings before interest, taxes, depreciation and amortization (EBITDA), the statement said, adding the target is excluding U.S. tax credits from the Inflation Reduction Act.
In the second quarter ended in June, the company’s EBIDTA margin was 15 percent when U.S. tax credits were included.
To keep its leading status in the battery market, the company said it will diversify its lithium-ion battery-centered lineup with lithium iron phosphate (LFP) and all-solid-state batteries (
ASBs).
An LFP battery is known for its enhanced safety features and low manufacturing costs despite low energy density and relatively short driving range compared with lithium-ion batteries and nickel cobalt manganese (NCM) batteries adopted by Korean companies.
An ASB is a next-generation battery solution with a filling of solid electrolyte that helps reduce fire risks and enhance the driving range in EVs.
In 2023, LGES posted 33.75 trillion won (US$25 billion) in sales.
On Monday, LGES shares jumped 4.1 percent to 420,000 won, far outperforming the broader Korea Composite Stock Price Index’s 1.6 percent gain.
LGES is set to release its preliminary earnings results for the third quarter on Tuesday.
Source: Yonhap News Agency