LG Energy Solution Announces 2024 Financial Results and 2025 Strategic Outlook
LG Energy Solution has officially released its financial results for the fourth quarter and full year of 2024. Alongside the financial disclosure, the company has outlined key strategic initiatives aimed at ensuring sustained growth in 2025 amid a rapidly evolving global energy market.
2024 Financial Performance Overview
For the full year 2024, LG Energy Solution reported consolidated revenue of KRW 25.6 trillion and an operating profit of KRW 575.4 billion. These figures represent a year-over-year decline of 24.1% and 73.4%, respectively, reflecting challenging market conditions and shifting industry dynamics. The operating profit margin was 2.2%, inclusive of the Inflation Reduction Act (IRA) tax credit effect.
Chang Sil Lee, CFO of LG Energy Solution, acknowledged the impact of evolving market trends, particularly in regional electric vehicle (EV) demand and pricing pressures. “Last year, we actively responded to EV demand in North America while navigating a slowdown in the European EV market. However, declining average selling prices (ASP) due to ongoing fluctuations in metal prices significantly impacted overall revenue,” Lee stated.
While a lower utilization rate contributed to increased fixed costs and reduced profitability, the company made notable improvements in material cost efficiency, a factor expected to play a crucial role in future financial stability.
Key Achievements in 2024
LG Energy Solution made significant strides in its global operations last year. The company successfully commenced stable mass production at its new joint venture plants in the U.S., Canada, and Indonesia. These strategic expansions have contributed to record-high production yields, solidifying LG Energy Solution’s position as a leader in battery manufacturing.
The company also focused on diversifying its product portfolio, particularly in the EV sector. Notable achievements include the introduction of new battery chemistries and form factors that cater to a broader range of automotive applications. Furthermore, LG Energy Solution accelerated its expansion into the energy storage system (ESS) market, securing large-scale power grid projects in North America.
In terms of technological advancements, 2024 saw the company gearing up for mass production of its 46-Series cylindrical batteries. Additionally, the pilot production line for dry electrodes in Ochang, Korea, represents a major step forward in innovation, positioning LG Energy Solution at the forefront of next-generation battery technology.
Another highlight of the year was the company’s proactive approach to securing high-quality, IRA-compliant critical minerals and lithium iron phosphate (LFP) cathode materials. These efforts included investments in lithium mining companies, ensuring a stable and cost-effective supply chain for the future.
In the fourth quarter, LG Energy Solution reported consolidated revenue of KRW 6.4512 trillion, reflecting a 6.2% quarter-on-quarter decline. The company’s quarterly operating loss stood at KRW 225.5 billion, accounting for the estimated IRA tax credit benefit of KRW 377.3 billion.
2025 Market Forecast
Looking ahead, LG Energy Solution anticipates robust growth in the global battery market, encompassing EVs, ESS, and IT applications. Industry analysts project an annual growth rate exceeding 20% from 2025 onwards.
In the EV market, the company expects its first-mover advantage in North America to strengthen further, particularly due to an increasingly protectionist trade environment. However, the company acknowledges that shifting green policies in key markets may temporarily slow EV demand growth.
The ESS sector is poised for expansion, driven by rising demand for regional renewable energy infrastructure. Energy security has become a pressing concern, leading to increased investments in power grid stabilization solutions. Additionally, the growing demand for AI-driven data centers is expected to contribute to a surge in electricity consumption, further underscoring the importance of securing a reliable battery supply chain. LG Energy Solution predicts that heightened tariffs on Chinese batteries, set to take effect in 2026, will reinforce the necessity of local battery production.
Strategic Business Initiatives for 2025
Short-Term Strategy: Navigating Market Volatility
LG Energy Solution has outlined a proactive approach to mitigate market fluctuations in the short term. The company plans to enhance financial stability by adjusting the timeline for new facility investments, prioritizing critical projects while maximizing operational efficiency at existing sites. This includes processing new orders for LFP and high-voltage mid-nickel batteries using idle production lines.
Furthermore, the company will focus on improving flexibility across its manufacturing facilities. By diversifying form factors within each plant and enabling cross-functionality between EV and ESS battery production lines, LG Energy Solution aims to respond swiftly to changing customer demands in different regions.
Mid-to-Long-Term Strategy: Reinforcing Competitive Edge
To sustain long-term competitiveness, LG Energy Solution is committed to product innovation, cost optimization, and technological advancements. The company will continue developing optimized battery solutions tailored to specific EV segments while differentiating its high-capacity LFP batteries for ESS applications.
Enhancing product quality remains a core priority. The company plans to advance its Battery Management System (BMS) diagnostic technologies and leverage AI-driven quality control measures to ensure the highest standards in battery performance and reliability.
Another key focus area is structural cost competitiveness. LG Energy Solution aims to reduce production costs by expanding the use of cost-effective raw materials, investing in upstream supply chain partners, and increasing automation across its manufacturing processes.
In terms of technological innovation, the company is accelerating research and development efforts in next-generation battery technologies. Key initiatives include:
- Expediting commercialization of dry electrode technology
- Advancing lithium-sulfur all-solid-state battery development
- Expanding business models beyond hardware into software-driven solutions, such as Battery-as-a-Service (BaaS) and Energy-as-a-Service (EaaS)
Financial Targets for 2025
LG Energy Solution has set ambitious financial goals for the upcoming year. The company aims to achieve a 5-10% year-over-year increase in consolidated Financial revenue in 2025. While it anticipates continued pressure on ASP due to low metal prices, revenue growth is expected to be driven by the ramp-up of mass production at new North American plants and increased shipments of next-generation battery products.
Additionally, the company plans to reduce capital expenditures (capex) by 20-30% compared to the previous year. This will be achieved by optimizing investment timelines and maximizing the efficiency of existing manufacturing facilities.
The estimated capacity eligible for IRA tax credits in 2025 is projected to be around 45-50GWh. As LG Energy Solution continues to expand its presence in North America, it remains well-positioned to capitalize on the region’s favorable policy landscape and growing demand for advanced battery solutions.
