LG Energy Solution Q1 Net Income Cuts in Half by Material Costs and Supply Chain Challenges, Focusing on the Strong EV Market – pv Magazine USA
Battery specialists plan to accelerate the production of smart batteries and make strategic material investments to reduce costs and increase profits.
LG Energy Solution will be available earlier this year Withdrawal from the solar module business The focus will be on increasing material and logistics costs, and now on energy storage systems and household energy management. In its first-quarter earnings report, the company reported first-quarter revenue of KRW 4.34 trillion (KRW), or about US $ 342 million, and operating profit of $ 204 million, but revenue declined.
Despite demand for cylindrical battery cells and increased productivity through automated manufacturing systems, the company said its consolidated sales were down 2.2% quarter-on-quarter and its net profit was halved to $ 204 million a year ago. Said. The company achieved an operating profit of 6%.
LG Energy Solution believes revenues have declined due to rising raw material costs, ongoing global semiconductor shortages, military conflicts between Russia and Ukraine and supply chain disruptions caused by regular COVID blockades. I am. The policy of prioritizing the replacement of recalled batteries also affected sales in the first quarter. Material costs are a challenge for battery makers as the prices of nickel, lithium and cobalt are soaring. LG Energy Solution said the company nevertheless saw stable operating profit.
In the future, LG Energy Solution’s annual sales target is $ 15. Mainly due to the rapid growth of the electric vehicle market, it was 1 billion yen (up 8% from the previous year). The company currently has a $ 236 billion backlog and is a customer of many of the major automakers.
“Despite the uncertainties of the global economy, LG Energy Solutions will continue to invest cautiously to innovate quality and make our products more competitive,” said Youngsoo Kwon, CEO of LG Energy Solutions. I am. “As a responsible and loyal business for our partners, shareholders and investors, LGES leads the energy industry into a battery-powered future with unmatched competitiveness.”
The company has invested about 7 trillion won to raise its battery production capacity to 200 GWh this year, aiming for 520 GWh by 2025. By region, the company’s battery capacity in 2025 will account for 41% in North America. It has the largest share in the region, with 37% in Asia and 22% in Europe.For example, last month the company announced Will invest Approximately $ 1.4 billion (USA) to build a factory in Queen Creek, Arizona, for the production of cylindrical batteries. Construction of this 11GWh capacity site began in the second quarter of this year and is planned for mass production in the second half of 2024. Cylindrical batteries will be supplied to North American EV manufacturers and power tool companies. America.
All of the company’s manufacturing facilities will be converted to smart factories to reduce costs while increasing manufacturing competitiveness. The new Arizona facility will be a fully automated smart factory with remote support, manufacturing intelligence, logistics automation and more.
The company plans to secure raw materials through long-term contracts and strategic equity investments to improve profitability despite soaring material prices. LG Energy Solution is working on the development of technology to better control the heat transfer of the pouch battery pack to ensure the competitiveness of the product. The company is also developing new cathode materials while introducing large capacity cylindrical battery cells with a new form factor.
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https://ift.tt/3usdDNT LG Energy Solution Q1 Net Income Cuts in Half by Material Costs and Supply Chain Challenges, Focusing on the Strong EV Market – pv Magazine USA
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