LG Energy Solution Reports Q3 Operating Profit of 731.2 Billion KRW, Up 40% Year-on-Year

LG Energy Solution announced that it achieved sales of KRW 8.2235 trillion and an operating profit of KRW 731.2 billion in the third quarter of this year.

At an earnings briefing held on the 25th, LG Energy Solution stated that third-quarter sales increased by 7.5% compared to the third quarter of last year (KRW 7.6482 trillion) but decreased by 6.3% compared to the previous quarter (KRW 8.7735 trillion). Operating profit rose by 40.1% compared to the same period last year (KRW 521.9 billion) and by 58.7% compared to the previous quarter (KRW 460.6 billion).

The amount of tax credit from the U.S. Inflation Reduction Act (IRA) reflected in this operating profit was KRW 215.5 billion. Due to the stable expansion and operation of new production lines, this increased by 94% compared to the previous quarter. Excluding this, the third-quarter operating profit was KRW 515.7 billion, with an operating profit margin of 6.3%.

Q3 Benefited from IRA... Operating Profit Up 40% Year-on-Year

Lee Chang-sil, Vice President and CFO of LG Energy Solution, said, "Sales fell about 6% compared to the previous quarter due to weak demand in Europe, adjustments in electric vehicle production by some customers, and a decline in metal prices in the first half. However, operating profit increased due to expanded sales focused on high-margin products, increased productivity of new North American lines such as the GM JV Phase 1, and cost efficiency efforts."

On the same day, LG Energy Solution detailed plans to 'fundamentally strengthen product competitiveness.' The challenging business environment is expected to continue in the fourth quarter due to slowing electric vehicle demand in Europe and China and falling prices of key raw materials such as lithium and nickel. LG Energy Solution plans to focus on solid growth based on electric vehicle demand in North America and growth in the ESS (Energy Storage System) business division.

For premium products like high-nickel NCMA (Nickel-Cobalt-Manganese-Aluminum), performance will be differentiated through enhanced safety via improved thermal management technology and the application of new materials. The nickel content, previously in the high 80% range, will be increased to over 90% to raise energy density, and safety will be further enhanced through design optimization and development of module and pack cooling systems as part of thermal management solutions. Additionally, rapid charging time will be reduced to under 15 minutes by utilizing high-capacity, high-efficiency silicon anode materials.

Through this, LG Energy Solution plans to expand orders related to premium electric vehicles from major customers. In fact, earlier this month, LG Energy Solution agreed to supply modules equipped with high-nickel NCMA-based pouch cells to Toyota, the world's largest automaker, at an annual scale of 20 GWh for 10 years starting in 2025.

On the 10th, LG Energy Solution headquarters on Yeouidaero, Yeongdeungpo-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Arizona Plant in the U.S. to Become Core Base for 46-Series Cylindrical Batteries

Efforts to strengthen the product portfolio targeting the mid-to-low-priced electric vehicle market will also accelerate. Representative products include high-voltage mid-nickel (Mid-Ni) NCM (Nickel-Cobalt-Manganese), manganese-rich, and LFP (Lithium Iron Phosphate) batteries, which secure price competitiveness.

The high-voltage mid-nickel (Mid-Ni) NCM battery lowers nickel and cobalt content, making it about 10% cheaper than existing products while improving performance in terms of energy density and thermal safety. Full-scale mass production will begin in 2025.

LG Energy Solution has decided to utilize its new production plant in Arizona, USA, as the core manufacturing base for the North American '46-series' (46mm diameter cylindrical batteries). This decision reflects increasing demand from several automaker customers for 46-series products, leading to a revision of the original plan to build a 27 GWh cylindrical battery plant for 2170 cells. Production capacity will be expanded from 27 GWh to 36 GWh. The pilot line for the 46-series being established at the Ochang Energy Plant is scheduled to start mass production in the second half of next year.

Kwon Young-soo, Vice Chairman and CEO of LG Energy Solution, said, "We will establish differentiated product competitiveness across all product lines from premium to mid-to-low price segments as a core driver for sustainable long-term growth and become a global leading company that provides the world's best customer value."

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