LG Energy Solution is Expecting Excellent Demand for Electric Vehicle (EV) Batteries in North America
EV battery giant LG Energy Solution
LG Energy Solution (LGES) is a battery company based in Seoul, South Korea. The company is expecting excellent demand for Electric Vehicle (EV) batteries in North America. LGES said that despite worries on account of Inflation they are expecting improved revenue this year.
LGES along with CATL, Panasonic, SK Innovation, and Samsung SDI is one of the largest battery makers in the world. The South Korean LG Energy Solution supplies batteries to Tesla, General Motors Co, and others.
The company is targeting revenue growth of 25-30% this year. The target is to achieve up to 33.3 trillion WON ($27 billion) in revenue.
Also read: Ford USA and CATL China are Reportedly Planning to Build an EV Battery Plant in USA
As all the EV wish to take a bigger bite out of the booming EV market, the demand for batteries from LG Energy Solution is also on the rise. The profit of LGES almost tripled in Q4 last year as they increased production to match the high demand and serve the huge order backlog. The company plans to increase capital expenditure by 50% or more in 2023 as compared to 2022.
LG Energy Solution has noted a few negative economic factors like low EV demand in Europe, but in the North American market, the case is entirely different. The North American market has a good demand for EVs. There is a rise in the number of customers demanding Made-in-USA batteries, to qualify for federal EV subsidies.
Keeping the subsidy issue in mind LGES is reviewing its investment plans in the proposed Arizona plant. The company expects nearly 50% of its global battery production capacity to come from the North American region in the future. LG aims for an annual battery capacity of about 540 gigawatt hours (GWh) by the end of 2025.
The current supply of batteries to Tesla is done from China by the LGES. However, the company is in Active Discussion with Tesla and other electric vehicle manufacturers to supply batteries from the Arizona factory.
LGES reported an operating profit of 237 billion WON ($193 million) for the Oct-Dec 2022 period, compared to 76 billion WON in the same period of 2021.
