Target 353 billion! Global power battery giant releases latest strategy

On October 7, LG Energy Solution, the world's third largest power battery manufacturer, released its latest mid- to long-term strategy: to expand its business from battery manufacturing to energy recycling business and become a true total solution provider.

Image source: LG New Energy

Based on this vision, LG Energy Solution aims to more than double its sales by 2028 compared to 2023. LG Energy Solution's sales in 2023 were 33.75 trillion won (currently about 176.513 billion yuan), so its sales target for 2028 is 353.025 billion yuan.

Weico.com Lithium battery It is noted that at the end of July, LG Energy Solution delivered the worst second quarter financial report in history (loss of about 24 billion won), and it is expected that the company's revenue in 2024 will drop by more than 20% compared with 2023. In this regard, LG Energy Solution has a "tough battle" to fight in the next five years, which is also the key reason for its transformation and extension of business.

In its latest mid- to long-term strategy, LG Energy Solution has announced its response measures:

1. Expand non- electric vehicle businesses such as energy storage systems (ESS) and urban air mobility (UAM) to build a balanced business portfolio;

2. Diversified product and customer structure, including lithium iron phosphate , lithium iron manganese phosphate, high-voltage nickel, 46 series, etc.;

3. Expand various service businesses such as battery leasing, rental and recycling by establishing a BaaS (Battery as a Service) ecosystem, and plan to increase the proportion of EaaS (Energy as a Service) business;

4. Strengthen the leading position in next-generation battery technology, including all-solid-state batteries and dry electrode processes.

In general, in the next five years, LG Energy Solution will vigorously develop diversified businesses, reduce the impact of the slowdown in the electric vehicle market, and more than double its sales.

To this end, LG Energy Solution has formulated specific medium- and long-term plans for core business units such as automotive batteries, small batteries, and ESS batteries, and has made North America and Europe its strategic focus, especially the North American market. The IRA Act, which has been implemented for two years, has contributed greatly to this. In 2023, LG Energy Solution received a total of 3.73 billion yuan in IRA subsidies, and received 1 billion yuan in subsidies in the first quarter of this year.

In terms of the overall mid- to long-term strategy, one of the key points is to create differentiated advantages in battery materials , processes and products.

LG Energy Solution plans to improve its market competitiveness in 2028 through high-voltage medium-nickel package products, lithium iron phosphate products with dry electrode process, etc., and plans to expand its 46 series to automobile manufacturers.

At the same time, LG Energy Solution plans to produce products that do not contain lithium negative electrodes and "graphite-based" all-solid-state products, and accelerate the mass production of "bipolar" semi-solid-state batteries, low-cost high-power batteries using sulfur and sodium, and lightweight aviation batteries using lithium metal.

One of the things that LG Energy Solution relies on is its proud dry electrode process technology. In July this year, it was reported that LG Energy Solution called dry-coating technology a "game-changing" battery manufacturing technology that would open a way for the company to strengthen its competitiveness.

At the same time, LG Energy Solution plans to complete a demonstration production line for the dry coating process in the fourth quarter and start full production in 2028. This is the first time that LG Energy Solution has disclosed the commercialization schedule of dry coating technology. Kim Je-Young, chief technology officer of LG Energy Solution, estimates that the dry process can reduce battery manufacturing costs by 17% to 30%.

In addition, LG Energy Solution plans to mass-produce ESS batteries in the United States starting in 2025, and to achieve the first place in the U.S. ESS battery market share and the top three in the world in ESS system integration (SI) by 2028, achieving a five-fold increase in sales. In its second-quarter financial report, LG Energy Solution made it clear that it plans to increase the operating rate of each production base by converting existing electric vehicle production lines to ESS production lines.

According to the latest data from South Korean research institute SNE Research, among the top 10 global power battery installed capacity rankings from January to August this year, LG Energy Solution continued to rank third with an installed capacity of 61.8GWh and a market share of 12.1%, but its year-on-year growth rate of 2.5% was much lower than that of the top two companies, CATL and BYD , both of which had year-on-year growth rates of more than 25%.