LG Chem Ltd. officially launched on Tuesday LG Energy Solution as a separate business unit engaged in battery production and energy solution facility. The spinoff stemmed from LG Chem’s pursuit to boost its battery business, keeping with a strong demand for electric vehicles (EV) worldwide.
Kim Jong-hyun, LG Energy Solution’s CEO, would lead the company’s goal to reach annual revenues of 30 trillion won (US$27 billion) by 2024.
Kim stated that LG Energy Solution pioneered South Korea’s battery industry with faith and determination to tackle challenges and generate profit. Currently, the company advances onwards to accomplish its new journey as an independent business unit. Additionally, LG Energy Solution would dedicate its expertise to developing superior quality technology alongside an eco-friendly business environment.
Kim joined LG in 1984 and headed LG Chem’s small-sized battery business in 2009. He took charge of the company’s electric vehicle battery business in 2013 and became CEO in 2018. LG Chem’s 2009 battery business revenue increased from 700 billion won (US$635 million) to 8.2 trillion won (US$7.4 billion) last year under Kim’s supervision.
LG Chem ranked first with a 24.6 percent market share from January to September and established 19.9 gigawatt-hours of batteries. China’s CATL followed with 23.7 percent market share and 19.1 gigawatt-hours of batteries.
LG Energy Solution’s expertise includes energy storage systems, small-sized batteries, and EV batteries. However, the company accumulated a backlog of 150 trillion won (US$136 billion), which prompted the increase in annual production capacity to 260 gigawatts by 2023. This expansion in annual production would require investments worth three to four trillion won (US$2.7-3.6 billion) annually.
Overcoming Challenges
As an independent subsidiary, LG Energy Solution would expand its partnership with significant EV makers. The wholly-owned subsidiary intends to go public and sell off stake funds to acquire investments for its annual target production.
However, aside from obtaining investments, the spinoff tackles immediate challenges concerning drawn-out battery patent lawsuits and battery safety issues.
Hyundai Motor, General Motors, and Opel recalled their EVs stacked with LG Chem batteries due to fires or explosions. LG Energy Solution works together with the automakers to solve the issue to ensure the safety of rechargeable batteries.
The company anticipates a final ruling on a trade secret misappropriation lawsuit against SK Innovation last year. The US International Trade Commission delivered a preliminary ruling in favor of LG Chem, scheduling a final ruling this December.
Check out other must-read articles from KoreaTechToday:
- LG Chem to Spin-Off Battery Business as LG Energy Solution
- Hyundai Motor Recalls Kona EVs After Recent Incident of Fire
- LG Chem, Neste Join Hands to Produce Eco-Friendly Synthetic Resins
- LG Creates First-Ever “Innovation Council” to Explore Future Technologies
