LG Energy Solution Ltd is ramping up its energy storage system (ESS) business, targeting a 30% share of total revenue from the segment by the end of the year. The move comes as the company looks to offset the impact of a global slowdown in electric vehicle (EV) demand.
The company expects to secure 50GWh of ESS production capacity in the US this year to address demand that it projects will grow at an annual average of 20% until at least 2030, ESS chief Kim Min Soo says during an earnings call.
The company has been converting multiple EV lines to expand ESS cell output to at least 60 gigawatt-hours from 36 GWh, targeting at least 90 Gwh in new orders this year.
While the Middle East conflict has spiked logistics and raw material costs, the resulting surge in oil prices is facilitating a rebound in consumer interest for EVs, though it might take a while to materialise through orders, according to chief financial officer Lee Chang Sil.
The company expects to meet an annual sales growth target of 15%-20%, supported by a projected 10% quarter-on-quarter revenue increase in 2Q, thanks partly to solid demand for LFP and mid-nickel batteries and hybrid cars in Europe.
LG Energy is mass-producing its new 46-series cylindrical battery cells at its Ochang plant after recently winning a large supply deal from an European automaker for its high-end model, according to Noh In Hak, vice-president for mobility & IT battery.
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