LG Energy aims to double sales by expanding non-EV business

BATTERY maker LG Energy Solution said it plans to more than double sales by 2028, through aggressively expanding non-electric vehicle businesses such as energy storage system.

The South Korean company also aims for mid-10 per cent earnings before interest, taxes, depreciation and amortization (Ebitda) margin, relative to sales, it said on Monday (Oct 7).

The target excludes US tax credits from the Inflation Reduction Act, it added.

LG Energy, whose Ebitda margin including US tax credits was 15.1 per cent as of the second quarter this year, will focus on stable profitability and cash generation by diversifying its business portfolio and advancing next-generation battery technology.

“We’ll no longer be limited to battery manufacturing, but will expand into an ‘energy business’ centered on the ‘energy cycle’,” chief executive officer Kim Dong Myung said. “Ultimately, we’ll build an energy ecosystem.”

The announcement comes ahead of LG Energy’s preliminary earnings result on Tuesday, which is forecast to miss analysts’ consensus.

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The Seoul-based battery supplier to automakers, including Tesla and General Motors, has been struggling to improve its earnings this year as its customers grapple with weakening electric-vehicle sales.

Other steps to grow revenue include strengthening its software and battery-related services, such as management, leasing and rental, the company said. It will also work on developing future battery technology, including solid-state and dry electrode processes.

LG’s business units, including cars, small batteries and energy storage systems (ESS), outlined specific strategies for growth with goals to dominate their markets by 2028.

The automotive division plans to enhance its North American and European market positions, while the ESS division targets fivefold sales growth and market dominance in the US, the company said. BLOOMBERG