Summary
– LG Energy Solution (LGES) reported a sales decline of 29.9% year-over-year to 6.3 trillion won
– The company had an operating profit of 157.3 billion won, down 75.2% from the previous year
– LGES posted an operating loss of 31.6 billion won in Q1 2024, excluding the AMPC
– Their global battery market share slightly dropped to 13.7%
– LGES aims to increase EV uptake with new battery technologies and expand its energy storage system business.
Article
LG Energy Solution (LGES) reported a provisional sales decline of 29.9% year-over-year in the first quarter of 2024, amounting to 6.3 trillion won (US$4.46 billion). The company also posted an operating profit of 157.3 billion won (US$114 million), representing a 75.2% decrease compared to the previous year. South Korean financial analysts noted that LGES experienced an operating loss in the first quarter when excluding the advanced manufacturing production credit (AMPC) from the Inflation Reduction Act (IRA) in the United States, with operating losses amounting to 31.6 billion won, excluding AMPC.
SNE Research reported that LG Energy Solutions’ global battery market share slightly declined by 0.2% to 13.7% between January and February. This decrease in market share has been attributed to the slowing demand for electric vehicles (EVs). Despite the challenges in the EV market, Tesla CEO Elon Musk remains optimistic about the future of electric vehicles, stating that EVs will ultimately dominate the market over plug-in hybrids. The company believes that other manufacturers pulling back on EVs in favor of plug-in hybrids is not the right strategy.
Looking ahead, LGES predicts that the penetration rate of EVs may decrease from the current level of 50% to the mid-30% by 2030. To combat this trend, the company plans to accelerate EV uptake by introducing low-cost iron phosphate batteries and increasing investments in NCM and LFP batteries. Additionally, LG Energy Solution aims to expand its energy storage system business to further promote the adoption of electric vehicles. The company is strategically positioning itself to remain competitive in the evolving EV market landscape.
In efforts to address the challenges in the EV market, LG Energy Solution is making strategic moves to adapt to the changing landscape. By forecasting the future penetration rate of EVs and introducing new battery technologies, the company aims to solidify its position in the market and capitalize on the growing demand for electric vehicles. This proactive approach demonstrates LGES’s commitment to innovation and growth in the evolving EV industry. Overall, LG Energy Solution’s focus on expanding its battery technology portfolio and energy storage system business indicates a strong resolve to overcome challenges and thrive in the competitive EV market.
The evolving landscape of the electric vehicle market presents both challenges and opportunities for companies like LG Energy Solution. By recognizing the shifting trends and actively pursuing innovative solutions, LGES is positioning itself to succeed in a competitive market. The company’s strategic initiatives, such as introducing new battery technologies and expanding its energy storage system business, reflect its commitment to growth and adaptation. As the demand for electric vehicles continues to rise, LG Energy Solution’s forward-thinking approach will likely play a key role in its success in the industry.
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