LG Truly Committed to Batteries... Appoints Kwon Young-soo as CEO

Key Contributor to External Expansion Surprise Appointment
Focus on Core Business and Commitment to Responsible Management
Risk Management and External Expansion Challenges
Urgent Priority on Stabilizing Joint Projects

[Asia Economy Reporter Choi Dae-yeol] LG Group's surprise appointment of Kwon Young-soo, Vice Chairman of LG Corporation (pictured), as the new CEO of LG Energy Solution is interpreted inside and outside the group as a move to strengthen responsible management through selection and concentration on core businesses. LG Energy Solution is considered one of the world's leading companies in terms of battery production capacity and technological level, but it currently faces numerous pending issues both internally and externally.

Vice Chairman Kwon is credited as a key figure in expanding the scale of LG's battery business, having led LG Chem's battery division in the past and significantly increased the number of customers. Amid intensifying domestic and international competition surrounding the battery business, he has taken on the important task of resolving quality issues that have arisen and fending off challengers.

In the past one to two years, quality issues have become a major concern in the battery industry due to a series of fires and recalls. LG, along with battery clients such as Hyundai Motor and General Motors (GM), decided on large-scale replacements and recalls. The cost of these aftercare measures is estimated to exceed 2 trillion won.

LG also needs to expand its scale. Most domestic and overseas factories are already operating at full capacity, so additional facilities are required. However, if they continue the past practice of receiving orders from finished car manufacturers first, then building factories and delivering products, it will be difficult to supply at the desired time. Competing battery companies are already aggressively competing for market share with a strategy of pre-orders and post-expansion. Research and development to hone technological capabilities cannot be neglected either. Since enormous funds are needed for these tasks, LG has been pursuing an initial public offering (IPO) within the year, but negotiations have been prolonged due to recall issues, pushing the timeline beyond this year. This is the background for the direct involvement of financial expert Vice Chairman Kwon.

LG Energy Solution and General Motors (GM) joint venture Ultium Cells is building a battery factory in Ohio, USA.

Since the mid-2000s, Vice Chairman Kwon has held key positions as president of major LG Group affiliates (LG Display, LG Uplus). About ten years ago, in 2012, he served as head of LG Chem's battery division and is regarded as the main figure who expanded its scale. At that time, he secured orders from global automakers such as Audi and Daimler, doubling the number of battery customers from about 10 to 20 within two years of his appointment. It was then that LG became the global number one in medium-to-large batteries used in electric vehicles.

Returning after about six years, it is not easy for him to catch a breath. For now, he must stabilize the large-scale joint factory projects currently underway and efficiently handle the influx of orders. This is because the electric vehicle market is beginning to blossom, and the battery should not be seen as a bottleneck.

Cost is an issue, but the change in market perception due to quality issues is also a challenge Vice Chairman Kwon must address. The company explained, "We must establish four consecutive large-scale joint ventures and factories for electric vehicle batteries with leading global automakers such as Hyundai Motor, General Motors (GM), and Stellantis," adding, "This is a critical time to smoothly supply orders worth 200 trillion won with top-level competitiveness."

Vice Chairman Kwon was favored during the tenure of former Chairman Koo Bon-moo and currently serves as Chief Operating Officer (COO) of LG Corporation, the holding company, under Chairman Koo Kwang-mo's leadership. Among the three vice chairmen of LG Group (Cha Seok-yong, Shin Hak-cheol), he is the only one regarded as a traditional LG man. LG Energy Solution stated, "As the battery business, a crucial core business of the group, is rapidly growing, and as a global leading company, it must widen the gap with competitors such as those in China and proactively prepare for the future. This appointment reflects Chairman Koo Kwang-mo's will and trust to select the most reliable manager."

This content was produced with the assistance of AI translation services.