LG Energy Solution released its third-quarter 2024 financial results, highlighting robust quarter-on-quarter revenue growth driven by expanded sales to major automakers and increased production at its joint venture facilities. The company also detailed its progress in large-scale supply agreements and outlined strategic plans for its electric vehicle (EV) and energy storage system (ESS) battery businesses.
Financial Performance
- Revenue: The company recorded consolidated revenue of KRW 6.8778 trillion in Q3 2024, reflecting an 11.6% increase quarter-on-quarter but a 16.4% decline year-on-year.
- Operating Profit: LG Energy Solution posted an operating profit of KRW 448.3 billion, up 129.5% from the previous quarter but down 38.7% from Q3 2023. This figure includes an estimated IRA tax credit of KRW 466 billion; without it, the company would have reported an operating loss of KRW 17.7 billion.
“Expanded sales to major European automakers and increased production at our joint venture facilities in North America and Indonesia, as well as substantial ESS revenue growth from grid-scale projects, improved the overall revenue compared to the previous quarter,” said Chang Sil Lee, CFO of LG Energy Solution.
Major Supply Agreements
In Q3 2024, LG Energy Solution secured significant orders for its new battery form factors and chemistries, totaling 160GWh. Key agreements include a 50GWh contract for cylindrical batteries with a major automaker for the North American market, expanding the company’s customer base beyond EV start-ups to established automakers.
Additionally, the company secured 109GWh worth of contracts for pouch-type NCM batteries tailored for commercial vehicles sold in Europe. These agreements are expected to boost the production efficiency of the company’s Poland facility starting in the second half of 2026.
Strategic Action Plans for EV and ESS Batteries
LG Energy Solution outlined its forward-looking strategy for its EV and ESS battery businesses:
- Diversified Battery Solutions: To meet the growing demand for varied battery chemistries and form factors across different EV segments, the company plans to offer options like LFP and High Voltage Mid-Ni batteries and to begin mass production of 46-Series cylindrical batteries.
- Focus on Technological Innovation: LG Energy Solution will enhance its materials and process technologies, including single crystal cathodes and silicon-based anodes, while developing dry electrode technology aimed for mass production by 2028. The company is also prioritizing safety innovations, such as advanced thermal propagation (TP) prevention technology for pouch-type batteries and optimized cooling structures for cylindrical batteries.
- ESS Market Expansion: As demand for grid-scale ESS solutions rises, particularly in North America, LG Energy Solution plans to leverage its local production capabilities and launch high-capacity LFP ESS batteries. The company also aims to integrate advanced energy management and system integration software to maintain a competitive edge.
Long-term Strategic Initiatives
LG Energy Solution’s mid- to long-term strategy focuses on three key pillars:
- Operational Flexibility: The company aims to optimize existing production lines by scaling down expansion plans and adjusting ramp-up speeds to enhance utilization rates.
- R&D Investment: By accelerating R&D for next-generation battery solutions, including bipolar semi-solid batteries and sulfide-based solid-state batteries, LG Energy Solution seeks to secure technological differentiation.
- Business Portfolio Expansion: The company plans to establish a closed-loop recycling system, expand its Battery-as-a-Service (BaaS) and Energy-as-a-Service (EaaS) offerings, and explore new market opportunities beyond EV applications.
“While we expect unprecedented shifts in external environments, we will be nimble in responding to these changes through our comprehensive business strategy,” said David Kim, CEO of LG Energy Solution. “Capitalizing on our unmatched product portfolio, we will enhance the values we’re providing to our customers, thereby securing solid leadership in the global battery market.”
