Much of that activity will be focused on the North American market which the battery manufacturing company headquartered in Seoul, South Korea, forecasts will grow more than 30 per cent in 2024.
“We have achieved high annual revenue growth of more than 30 per cent for two consecutive years by actively responding to strong market demand in North America,” LG Energy Solution chief financial officer Chang Sil Lee said in a statement.
“We also successfully generated 78 per cent on-year increase in annual operating profit by improving profitability through cost reduction and yield/productivity improvement, on top of the (American) IRA tax credit recognition.”
The company reported consolidated revenues of just over $34 billion with an operating profit of $2.3 billion for 2023. That represents an annual increase of 32 per cent in consolidated revenues and a 78-per-cent rise in operating profit.
With global growth expected to slow to the mid-20-per-cent range in 2024, Lee said the company will concentrate on advancing technology and productivity. That includes a focus on bringing more inexpensive batteries to the market to fend off Chinese competitors.
It plans to start mass production of low-cost lithium iron phosphate batteries in 2025 and nickel-cobalt-manganese (NCM) batteries in 2026. The NCM batteries are expected to lower costs by 10 per cent.
In the premium electric vehicle segment, the company will boost the energy density of its high-nickel (NCMA) batteries by increasing nickel content to 90 per cent. By adopting high-capacity, high-efficiency silicon anodes the battery will offer a full charge in less than 15 minutes.
LG will also introduce lithium-sulphur batteries in 2027 capable of getting 320 km of range from a five-minute charge.
Stellantis on Tuesday confirmed it plans to introduce lithium-sulphur batteries in its future vehicles during the unveiling of the Chrysler brand’s Halycon concept car.
Lee credited LG Energy’s first ‘full-fledged year’ in the North American market for boosting the year-end numbers, despite the slowing of EV adoption globally. Along with Windsor, the company has seven other projects either operating or under construction.
“We gained speed with the successful ramp-up of (General Motors’) JV (Ultium Cells) plant in Ohio, as well as investments in our stand-alone Arizona production facility for cylindrical and energy storage systems (ESS) batteries,” Lee said.
“With the second joint venture with Hyundai Motors and the supply agreement with Toyota, we have also diversified our customer portfolio.”
The company remains optimistic about the coming year in North America, particularly for the latter half of 2024 with the scheduled launch of a number of new electric vehicles (EVs) into the U.S. market. The declining cost of the critical minerals used in batteries is also expected to make EVs more affordable and draw more consumer interest.
LG Energy officials also expect the full impact of the American Inflation Reduction Act and eventually the matching Canadian subsidies will begin to be felt as 2025 draws closer.
The world’s second-biggest supplier of EV batteries added its well-positioned with its localized supply chain to take advantage of its first-mover position in North America.
“Last year, we have also established sound supply chain by expanding sourcing of IRA-compliant critical minerals from the U.S. FTA (free trade agreement) countries and reinforcing strategic cooperation for recycling business with partners by region,” Lee said.
