South Korean battery firm LG Energy Solution (LGES) is turning its focus on the energy storage system (ESS) markets amid a projected short-term slow down in electric vehicle demand caused by tariff and policy changes in the US, Europe, and the UK.
The firm believes demand in the ESS market and advancements in autonomous driving technology will drive mid-to long-term growth. It plans to capitalise by focusing on ‘new business opportunities’, including existing and new renewable energy plants, and AI data centers.
LGES Battery production plans
LGES says it will maximise its existing production capacity by focusing on ESS batteries and new form factors and chemistries. The company aims to expand its annual production capacity for ESS batteries to 17GWh by the end of this year.
In the US, the company will expand its ESS business and aims to secure more than 30GWh of annual production capacity in the region by 2027. This focus will see the firm drive plans to establish more ‘local’ ESS battery production. For example, its Holland, Michigan plant began manufacturing lithium iron phosphate (LFP) batteries in May this year. It expects this move – i.e securing local production capabilities in the country – will protect it from recent US policy changes that will strengthen barriers against Prohibited Foreign Entities (PFE) entering the US battery market.
In Europe, LGES plans to start mass producing mid- to low-end batteries such as high-voltage mid-nickel and LFP batteries at its Poland facility in the second-half of this year.
In terms of technological advancement, the firm plans to enhance its product portfolio with EV/ESS LFP batteries and EV LMR (lithium manganese-rich) batteries, while also advancing product competitiveness—including energy density. LGES plans to launch EV batteries with the charging speed of less than 10 minutes by 2028. It will ‘evaluate’ the production feasibility of dry electrodes this year.
Revenue announcement
Last month, the company announced a consolidated revenue of KRW 5.6 trillion ($4 billion), an 11.2% decrease quarter-on-quarter. However, its operating profit was KRW 492.2 billion ($354.4 million), marking a 31.4% increase quarter-on-quarter, with operating profit margin of 8.8%.
The operating profit includes North American production incentive, which is estimated at KRW 490.8 billion ($353 million).
Image credit: LGES
