Company to expand into 'circular energy business,' going beyond battery manufacturing
LG Energy Solution plans to stand at the center of the entire circular energy ecosystem, unlocking limitless business opportunities
The company aims to lead market as a comprehensive energy solution provider, leveraging its accumulated technological prowess and capabilities
Four key mid-to-long-term strategies announced, aiming to more than double the revenue by 2028
Building a balanced business portfolio by expanding Non-EV businesses
Diversifying product and customer portfolios
Establishing a foundation for software and service businesses
Strengthening leadership in next-generation battery technology
SEOUL, South Korea, Oct. 7, 2024 /PRNewswire/ -- LG Energy Solution has announced its corporate vision of "Empower Every Possibility" with the aim of transcending the battery manufacturing sector and positioning itself at the heart of the global circular energy ecosystem. This marks the first time LG Energy Solution has introduced a corporate vision since its establishment at the end of 2020.
The new vision underscores that the essence of LG Energy Solution's business lies not merely in battery production, but in facilitating the energy circulation across the entire cycle from storage to movement of energy. The company intends to become the center of this energy ecosystem, unlocking limitless business opportunities.
The company also aims to lead the market as a comprehensive energy solution provider by continuously evolving its business structure, including expanding beyond hardware to software and services business while building a more sustainable energy ecosystem.
"Our vision encapsulates the ultimate goal of LG Energy Solution to enable sustainable growth," said David Kim, CEO of LG Energy Solution. "The meaning of this vision is to expand our business with energy that awakens all potential powers, thereby enabling the company and its members to realize infinite growth potential."
He added, "Based on LG Energy Solution's DNA of success, which continually embraces opportunities to achieve remarkable results, we will generate more business prospects while strengthening our technological leadership to thrive in the market."
Eyes set on doubling the revenue by 2028, the company outlines four mid-to-long-term strategies
LG Energy Solution presented its five-year goals to more than double the revenue compared to 2023 (KRW 33.7 trillion), and achieve mid-teen percent EBITDA margin (excluding the IRA tax credit) by 2028 to secure stable profitability and cash generation capabilities.
Aligned with these goals, the company also outlined four mid-to-long-term strategies: building a balanced business portfolio by expanding non-EV businesses; diversifying the EV product and customer portfolios; securing a business foundation in software and services; and strengthening next-generation battery technology leadership.
First, the company will seek to secure a balanced business portfolio by actively expanding its non-EV businesses. The company plans to reduce dependence on the EV battery business and continue to increase the Energy Storage System (ESS) business in its portfolio. Furthermore, the company will put more efforts into new application businesses with high growth potential, such as Urban Air Mobility (UAM), vessels, and robotics to construct a more resilient business structure that can withstand market fluctuations.
Second, LG Energy Solution will diversify its EV products and customers. Beyond premium batteries centered on high-nickel chemistry, the company will improve its competitiveness in affordable markets through its LFP, LMFP, and high-voltage mid-nickel products. Additionally, the company plans to expand its cylindrical battery customer portfolio to include traditional automakers leveraging its 46-series, and will actively consider developing other new form factors tailored to customer needs.
Third, the company aims to establish a solid revenue structure with the expansion of its software and service businesses. In addition to its industry-leading Battery Management Systems (BMS), the company will offer various services including battery leasing, rental, and recycling to establish a comprehensive Battery-as-a-Service (BaaS) ecosystem. Furthermore, it will evolve its Energy-as-a-Service (EaaS) business model to contribute more to energy stabilization and the circular energy economy.
Finally, LG Energy Solution will focus all efforts on securing leadership in next-generation battery technologies to bring more innovation to the sector. Regarding solid-state batteries, the company plans to lead the market by producing anodeless products that exclude lithium anodes, and 'graphite-based' anode products. The company also plans to accelerate the mass production of 'bipolar' semi-solid batteries and low-cost high-power batteries applying sulfur and sodium. Furthermore, leveraging its outstanding dry electrode manufacturing process, the company will rapidly enhance its overall competitiveness in cost, energy density, and production yield.
Each business division shares key strategies to gain upper hands in future markets
Following the announcement of its vision, LG Energy Solution presented detailed mid-to-long-term market strategies for its core Advanced Automotive Battery, Mobility & IT Battery, and Energy Storage Systems (ESS) Battery businesses.
For the Advanced Automotive Battery division, the company unveiled a growth roadmap with the mid-to-long-term goal of securing the top position in North America and reinforcing its foothold in Europe by enhancing its fundamental strengths. By 2026, the division will focus on overcoming the temporary slowdown of the EV market by improving the operational efficiency of its global production facilities. By 2028, it intends to solidify competitive edge in materials and processes with high-voltage mid-nickel pouch products and dry electrode LFP products. By 2030, the division has set an objective of securing a leading position in the EV battery market through overwhelming technological prowess and strategies tailored to specific regions and customers.
The mobility & IT battery division aims to cement its current position as the No. 1 in the global market and further widen its lead by 2028. To this end, the division will prioritize the successful mass production of its 46-series that is optimized for mobility environments, securing competitiveness across various EV models. Additionally, it will actively pursue new customer acquisition in high-power products such as power tools, vacuum cleaners, and battery backup units (BBUs), as well as in AI data servers. Furthermore, the division plans to enhance cost competitiveness by securing new technologies and processes, and achieve logistical advantages through the strategic expansion of its global production sites.
For the ESS business, the division targets a five-fold increase in revenue by 2028 through securing the largest market share in the U.S. ESS battery market. It also aims to become among the top three global system integrators (SI). In the near term, the division will pursue a leading position in the North American market through the full-scale production of ESS cells in the U.S., which is set to start in 2025, advanced SI capabilities through LG Energy Solution Vertech, and new products with higher energy capacity and longer duration. In the long term, LG Energy Solution plans to proactively respond to the rapidly changing market and secure high-margin opportunities by developing next-generation products and strengthening its power trading business.
Pursuing four core values of growth, challenge, action, and collaboration to achieve its vision
In order to achieve its vision and four mid-to-long-term strategies, LG Energy will actively pursue four core values: Power of Growth; Power of Challenge; Power of Action; and Power of Collaboration.
These core values emphasize the need to continuously strive for growth, challenge seemingly impossible goals, execute on set objectives, and work together to achieve common aims.
To this end, LG Energy Solution plans to foster a corporate culture of execution, where employees are encouraged to challenge themselves with new perspectives and approaches so that they can diligently pursue their goals once a direction is set. The company also highlighted the importance of collaboration among its workforce of 35,000 employees with diverse nationalities, backgrounds, and experiences to create differentiated value.
"We have established global standards in the battery industry with our longstanding legacy in the business and will continue to maintain our industry leader status," said David Kim, CEO of LG Energy Solution. "I am confident that if we support each other as pace-setters and join hands, our long journey will lead us to even more wonderful landscapes and futures."
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 https://news.lgensol.com.
