LG Energy Solution posts KRW 25.6 trillion in consolidated revenue and KRW 575.4 billion in operating profit in 2024
Company to focus on proactively responding to market volatilities in the short term and securing fundamental competitiveness in the mid-to-long term
This year's guidance forecasts a 5-10 percent year-on-year increase in annual revenue, with capital expenditure expected to be reduced by 20-30 percent compared to last year
SEOUL, South Korea, Jan. 24, 2025 /PRNewswire/ -- LG Energy Solution (KRX: 373220) today announced its fourth-quarter and full-year earnings for 2024, along with its key business initiatives for 2025.
For the full year, the company reported KRW 25.6 trillion in consolidated revenue and KRW 575.4 billion in operating profit, a year-on-year decrease of 24.1 percent and 73.4 percent, respectively. The operating profit margin was 2.2 percent, including the IRA tax credit effect.
"Last year, we actively responded to EV demand in North America," said Chang Sil Lee, CFO of LG Energy Solution. "At the same time, sales in Europe decreased due to slow EV market growth, while average selling price (ASP) also declined because of continued metal price impact, leading to a decrease in our full-year revenue."
"Although a lower utilization rate led to increased fixed costs and lower profitability, we saw continued improvements in material cost ratio last year," Lee said.
In 2024, LG Energy Solution initiated the stable mass production its new joint venture plants in the U.S., Canada, and Indonesia, and achieved the record-high yield, securing capabilities for a stable global operation. In terms of the EV business, the company successfully expanded its product lineup with new chemistries and form factors, and also expanded its ESS business by accelerating its intake of large-scale power grid projects in North America.
Last year marked a year of technological advancement for LG Energy Solution, as it prepared for the mass production of its 46-Series cylindrical batteries and pilot production line for dry electrodes in Ochang, Korea. In addition, the company secured high-quality, IRA-compliant critical minerals and LFP[1] cathode materials by taking various proactive measures, such as investing in a lithium mining company.
In the fourth quarter, the company posted consolidated revenue of KRW 6.4512 trillion, a 6.2 percent decrease quarter-on-quarter. Its quarterly operating loss was KRW 225.5 billion, including the estimated IRA tax credit amount of KRW 377.3 billion.
2025 Market Forecast
The global battery market, encompassing the EV, ESS, and IT sectors, is expected to grow by over 20 percent[2] annually starting in 2025.
For the EV market, the company expects its first-mover advantages in the North American battery market to continue to expand, driven by the growing trend of protectionism. At the same time, the increasing volatility of green policies in major countries is expected to decelerate the growth of EV demand in the short term.
Regarding the ESS market, LG Energy Solution foresees an increasing need for regional renewable energy infrastructure thanks to the emerging importance of energy security. The company also expects power demand to surge on the back of the expansion of AI-driven data centers and predicts securing local battery supplies will become ever more critical in response to the higher tariffs on batteries from China set to take effect in 2026.
2025 Key Business Initiatives
In the short term, LG Energy Solution will focus on proactively responding to market volatilities. The company will enhance its financial stability by adjusting the timeline of investment for the construction of new facilities and prioritizing the execution of critical investments. At the same time, it will maximize the utilization of its existing capacity by processing new orders for LFP and high-voltage mid-nickel batteries on idle production lines within existing facilities. The company will also enhance its operational compatibility across production facilities, namely by diversifying form factors within each facility and converting production lines between EV and ESS batteries to proactively respond to local customer needs.
In the mid-to-long term, LG Energy Solution will continue its efforts to reinforce its fundamental competitiveness. It will secure a competitive edge in products by offering optimized solutions for each EV segment and further differentiating its high-capacity LFP batteries for ESS systems. The company will also focus on enhancing product quality by advancing its BMS[3] diagnostic technologies and AI-based quality management system.
Securing structural cost competitiveness is another long-term initiative. As part of this, the company will expand the use of cost-effective materials, promote investment in upstream companies, and reduce processing costs by expanding production automation. To prepare for the future, it will expedite the commercialization of dry electrodes and lithium-sulfur all-solid-state batteries by setting up their pilot lines, while also expanding the business from hardware to software by fostering its BaaS[4] and EaaS[5] businesses.
Based on its key business initiatives for this year, LG Energy Solution announced its goal to achieve a 5-10 percent year-on-year increase in annual consolidated revenue in 2025. Although it predicts unfavorable ASP due to the continued trend of low metal prices, the company expects that the initiation of mass production at its new plants in North America and the increase in new product shipments will positively contribute to this year's revenue growth.
The company also aims to reduce this year's capex by 20-30 percent compare to last year, by adjusting the pace of investment and maximizing the utilization of existing sites. In addition, the estimated capacity eligible for the IRA tax credits this year is expected to be around 45-50GWh, as the company is well positioned to realize its first-mover advantages in the region by starting operations at its new facilities and expediting the mass production of its ESS batteries.
[1] LFP: lithium, iron, phosphate
[2] GWh basis
[3] BMS: battery management system
[4] BaaS: battery-as-a-service
[5] EaaS: energy-as-a-service
About LG Energy Solution
LG Energy Solution (KRX: 373220), a split-off from LG Chem, is a leading global manufacturer of lithium-ion batteries for electric vehicles, mobility, IT, and energy storage systems. With 30 years of experience in revolutionary battery technology and extensive research and development (R&D), the company is the top battery-related patent holder in the world with over 58,000 patents. Its robust global network, which spans North America, Europe, and Asia, includes battery manufacturing facilities established through joint ventures with major automakers. Committed to building sustainable battery ecosystem, LG Energy Solution aims to achieve carbon neutrality across its value chain by 2050, while embodying the value of shared growth and promoting diverse and inclusive corporate culture. To learn more about LG Energy Solution's ideas and innovations, visit https://news.lgensol.com.
