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LG Energy Solution Makes Progress Amid Market Uncertainties, Aims to Strengthen Fundamental Competitiveness This Year

April 25, 2024 - 15:10 By PRNEWSWIRE
  • LG Energy Solution records KRW 6.1287 trillion in consolidated revenue and KRW 157.3 billion in operating profit
  • Despite market uncertainties, the company bears fruits in expanding U.S. operation and developing new business areas
  • LG Energy Solution to focus on strengthening fundamental competitiveness by improving investment efficiency and cost-competitiveness

SEOUL, South Korea, April 25, 2024 /PRNewswire/ -- LG Energy Solution (KRX: 373220) today announced its first quarter earnings, along with its key achievements in expanding U.S. production operations and new businesses.

The company posted consolidated revenue of KRW 6.1287 trillion, a 23.4 percent decrease quarter-on-quarter. It also marked approximately 30 percent decrease from the same period last year. The company's first quarter operating profit was KRW 157.3 billion, a 53.5 percent decrease quarter-on-quarter and 75.2 percent decrease year-on-year, with a margin of 2.6 percent.

"Revenues from cylindrical EV batteries have increased by double-digit, as we have taken active response to demands from the strategic customer," said Chang Sil Lee, CFO of LG Energy Solution. "However, total revenue declined due to demand weakening in the upstream market, in addition to prolonged metal price impact on average selling prices (ASP)."

"The operating profit was affected by fixed cost burden from revenue decrease and utilization rate adjustment caused by EV demand slowdown, as well as the increased costs of metal expenses from lagging consumption of raw material inventories," Lee said.

The figure includes the estimated IRA tax credit amount of KRW 188.9 billion, which has also declined due to demand slowdown and the temporary suspension of production lines in the Michigan facility's retooling. Excluding the IRA tax credit, the company would have recorded quarterly operating loss of KRW 31.6 billion.

  • Stable operation and continued business achievements amid market uncertainties

LG Energy Solution, despite global EV demand slowdown and subsequent market uncertainties, has continued with its investments for future-preparedness and successfully made key achievements in its stable global operation and major business areas.

In the first quarter, the company's GM joint venture (JV) plant in Tennessee started production, with successful first shipment to customer in early April. The JV is expected to gradually expand its average annual production capacity to 50GWh, providing innovative batteries that will power GM's upcoming models with BEV3[1] platform.

LG Energy Solution achieved another significant milestone in its operation with the Arizona manufacturing complex. Consisting of the company's first stand-alone cylindrical and ESS battery plants in North America, the complex will secure the average annual production capacity of 53GWh. The company aims to reinforce its technological leadership in North America with the 46-Series cylindrical batteries and LFP ESS batteries that will be manufactured in the Arizona complex, and offer proactive response to local customers.

Also, to create a virtuous cycle for growth, LG Energy Solution has been committed to developing new business areas, namely battery software and related services. As part of such efforts, LG Energy Solution entered into strategic partnership with Qualcomm Technologies. In battery-related services, LG Energy Solution officially launched its battery swapping stations, with 20 stations now installed in Seoul. Through these new businesses, the company will pursue technological leadership in not just battery manufacturing and sales, but in battery-related software and service areas.

Lastly, in the first quarter, LG Energy Solution enhanced its resiliency against market uncertainties by expanding its global supply chain and securing investment resources. To establish a sound supply chain, the company signed supply agreements on LFP cathode materials (160,000 tons for five years) with Changzhou Liyuan and IRA-compliant lithium concentrate (85,000 tons annually) with WesCEF.

To secure investment resources and mitigate short-term financial burden, LG Energy Solution issued the largest-ever KRW-denominated corporate bond and signed a long-term lease agreement on its cylindrical EV battery plant in Arizona.

  • The company to pursue fundamental strengths this year, focusing on investment efficiency and cost-competitiveness

LG Energy Solution also announced a whole-year action plan, aiming to heighten its fundamental competitiveness.

First, in response to EV demand dynamics, LG Energy Solution will proactively improve its investment and cost efficiency. It will adjust capex size and execution speed as per priority, and optimize the capacity efficiency by maximizing each facility's production capacity. The company will also improve its operational cost structure by optimizing the logistics and utility costs.

In addition to heightened efficiency, the company plans to strengthen cost innovation on raw material costs. It will reduce material costs through expanding direct sourcing from critical minerals to precursors, and secure cost strength through investing in value chains.

At the same time, to continue the growth momentum, LG Energy Solution will further diversify its global production footprint based on solid partnership with JV partners. In the second quarter, the company's JV with Hyundai Motor Group in Indonesia (10GWh) has started mass production, and JV with Stellantis in Canada (45GWh) will start operation as well in the second-half of this year.

Lastly, the company seeks to expand its product lineup, capitalizing on its unmatched technological leadership. Its Ochang plant in Korea will start mass producing 46-Series cylindrical batteries in the third quarter. After starting to produce ESS LFP batteries in Nanjing, China last year, the company will increase the supply to the North American and European markets, responding to the demand from power grid projects.

"Despite challenging market outlook this year, we will establish a solid foundation for unmatched technological leadership by reinforcing our fundamental competitiveness and providing differentiated values to our customers," said David Kim, CEO of LG Energy Solution.

About LG Energy Solution

LG Energy Solution (KRX: 373220), a split-off from LG Chem, is a leading global manufacturer of lithium-ion batteries for electric vehicles, mobility, IT, and energy storage systems. With 30 years of experience in revolutionary battery technology and extensive research and development (R&D), the company is the top battery-related patent holder in the world with over 58,000 patents. Its robust global network, which spans North America, Europe, and Asia, includes battery manufacturing facilities established through joint ventures with major automakers. Committed to building sustainable battery ecosystem, LG Energy Solution aims to achieve carbon neutrality across its value chain by 2050, while embodying the value of shared growth and promoting diverse and inclusive corporate culture. To learn more about LG Energy Solution's ideas and innovations, visit

[1] BEV3: Battery Electric Vehicle, Generation 3