South Korea’s leading battery maker, LG Energy Solution Ltd (LGES), has reported an operating loss of 225.5 billion won ($155 million) for the Q4 of 2024. This marks a significant shift from the operating profit of 338.2 billion won recorded in the same period last year. According to the company’s regulatory filing, sales fell by 19% year-over-year to 6.45 trillion won, down from 8 trillion won.
The downturn is attributed to a slowdown in global electric vehicle (EV) sales, which LGES describes as a stagnation phase or “chasm” before the widespread adoption of EVs.
For the full year of 2024, LGES expects its operating profit to drop by 73%, from 2.16 trillion won in 2023 to 575.4 billion won. Sales are also anticipated to decline by 24%, falling to 25.62 trillion won from 33.75 trillion won. The company plans to release its final earnings results later this month.
Diversification Amid EV Slowdown
To counter the temporary slowdown in EV demand, LGES is focusing on diversifying its business. The company plans to expand its non-EV segments, such as energy storage systems (ESS), which are witnessing rising demand. Some global battery production lines will be repurposed to produce ESS to meet market needs.
Despite the challenges, LGES remains committed to strengthening its position as a leading car battery supplier and expects the EV market to recover in the future.
LGES operates three battery cell plants in North America, including two in partnership with General Motors (GM) and one in Holland, Michigan. Additional plants are under construction in Michigan, Georgia, and Ohio in the U.S., as well as Ontario, Canada, in collaboration with GM, Hyundai Motor Group, Honda Motor Co., and Stellantis N.V.
Outside North America, LGES has manufacturing facilities in South Korea, Poland, China, and Indonesia, further solidifying its global presence.
Looking Ahead
While the EV market experiences a temporary stagnation, LGES is positioning itself to weather the downturn by diversifying its offerings and expanding its global footprint. The company’s investments in ESS production and its partnerships with leading automakers underscore its strategy to remain competitive in the evolving energy solutions market.
