LG Energy Solution (LGES), South Korea's largest lithium-ion battery company, unveiled its corporate vision and mid- to long-term business strategy on October 7th, aiming to double its revenue by 2028 with focus on the markets of ESS, the US as well as diversification of product & business portfolio.
Overall, the company will position itself at the center of the entire circular energy ecosystem and create unlimited business opportunities based on this. The company will also use its accumulated technological strength and capabilities to lead the market as a comprehensive energy solution provider. Based on this corporate vision, LGES announced four key mid- to long-term strategic plans, including expanding non-electric vehicle business, achieving a diversified product and customer portfolio, building a foundation for software and service business, and strengthening the development of next-generation battery technology, with the goal of doubling its operating income by 2028.
Specifically, LGES updated its 2020 corporate vision, emphasizing that the essence of LGES's business is not only in battery production but also in promoting the circulation of energy throughout the entire cycle from energy storage to movement. The company is positioned at the center of the global circular energy ecosystem, unleashing unlimited business opportunities.
To Double Revenue by 2028, Based on Four Mid- to Long-Term Strategies
LGES has set a five-year goal to at least double its operating income based on the 2023 revenue (33.7 trillion won), and to achieve an EBITDA profit margin of aproximately 15% (excluding IRA tax credits) to ensure the company's stable profitability and cash flow.
Based on the above goals, the company has proposed four mid- to long-term strategies: to establish a balanced business portfolio by expanding non-electric vehicle business; to achieve diversification of electric vehicle products and customers; to ensure the business foundation of software and services; and to strengthen the leadership in next-generation battery technology.
Firstly, the company will ensure a balanced business portfolio by actively expanding its non-electric vehicle business. The company plans to reduce the electric vehicle power battery business and continue to increase its energy storage system (ESS) business in its portfolio. In addition, the company will increase investment in new application businesses with high growth potential, such as urban air mobility (UAM), electric vessels, and robotics, to build a more resilient business structure that can withstand market fluctuations.
Secondly, LGES will diversify its electric vehicle products and customers. In addition to high-end batteries centered on high-nickel chemistry, the company will also develop LFP, LMFP, and high-voltage mid-nickel battery products to improve its competitiveness in the cost-sensitive market. In addition, the company plans to expand its cylindrical battery customer portfolio, including automotive manufacturer customers of its 46-series large cylindrical batteries, and will actively develop new customers through customized battery specifications.
Thirdly, the company will establish a solid revenue structure by expanding its software and service business. In addition to the industry-leading battery management system (BMS), the company will also provide a variety of services, including battery leasing, rental, and recycling, to establish a comprehensive Battery-as-a-Service (BaaS) ecosystem. In addition, the company will develop its Energy-as-a-Service (EaaS) business model to contribute more to energy stability and the circular energy economy.
Finally, LGES will go all out to ensure its leadership in the field of next-generation battery technology, bringing more innovation to the industry. In the field of solid-state batteries, the company plans to lead the market by producing "anode-free" battery products that do not contain lithium in anodes and "graphite-based" anode battery products. The company also plans to accelerate the mass production of "bipolar" semi-solid batteries and low-cost high-power batteries using sulfur and sodium. In addition, the company will use its excellent dry electrode manufacturing process to quickly improve its overall competitiveness in cost, energy density, and yield.
Each Business Unit Shares Key Strategies to Gain an Upper Hand in Future Markets
After the announcement of its vision, LGES provided detailed mid- to long-term market strategies for its three core battery business units — Advanced Automotive Battery, Mobility & IT Battery, and Energy Storage Systems (ESS).
Advanced Automotive Battery: The company announced a growth roadmap with the mid- to long-term goal of securing the top position in North America and strengthening its foothold in Europe by enhancing its fundamental strengths. By 2026, the division will focus on overcoming the temporary slowdown of the electric vehicle market by improving the operational efficiency of its global production facilities. By 2028, the company intends to solidify its competitive edge in materials and processes with high-voltage mid-nickel pouch battery products and dry electrode LFP battery products. By 2030, the division has set an objective of securing a leading position in the electric vehicle battery market through overwhelming technological prowess and strategies tailored to specific regions and customers.
Mobility & IT Battery: The goal is to consolidate its current position as the number one in the global market and further widen its lead by 2028. To this end, the division will prioritize the successful mass production of its 46-series optimized for mobility environments, securing competitiveness across various EV models. Additionally, it will actively pursue new customer acquisition in high-power products such as power tools, vacuum cleaners, and battery backup units (BBUs), as well as in AI data servers. Furthermore, the division plans to enhance cost competitiveness by securing new technologies and processes, and achieve logistical advantages through the strategic expansion of its global production sites.
ESS Business: The division targets a five-fold increase in revenue by 2028 through securing the largest market share in the U.S. ESS battery market. It also aims to become among the top three global system integrators (SI). In the near term, the division will pursue a leading position in the North American market through the full-scale production of ESS cells in the U.S., which is set to start in 2025, advanced SI capabilities through LG Energy Solution Vertech, and new products with higher energy capacity and longer duration. In the long term, LG Energy Solution plans to proactively respond to the rapidly changing market and secure high-margin opportunities by developing next-generation products and strengthening its power trading business.
“We have established global standards in the battery industry with our longstanding legacy in the business and will continue to maintain our industry leader status,” said David Kim, CEO of LG Energy Solution. “I am confident that if we support each other as pace-setters and join hands, our long journey will lead us to even more wonderful landscapes and futures.”
