LG Energy Solution has reported a challenging first quarter of 2024, with its financial performance hindered by a significant operating loss when the benefits from the U.S. Inflation Reduction Act are excluded. The company’s first-quarter sales were recorded at 6.13 trillion won (US$4.46 billion), marking a sharp decrease of 29.9 percent from the same period last year. Operating profits also plummeted by 75.2 percent to 157.3 billion won, inclusive of the Advanced Manufacturing Production Credit (AMPC) related to the U.S. IRA, which totaled 188.9 billion won.
Excluding the impact of the AMPC, LG Energy Solution experienced operating losses amounting to 31.6 billion won. This financial dip reflects broader challenges within the global electric vehicle (EV) market, which has seen a slowdown in growth due to relaxed automotive regulations, particularly in the United States and Europe.
The company’s global battery market share also declined slightly, from 13.9 percent to 13.7 percent in the first two months of the year, as reported by SNE Research. This marginal decrease underscores the competitive pressures and shifting dynamics within the EV sector.
In response to these market conditions, LG Energy Solution is looking to pivot and stimulate growth through strategic product innovations and expansions. The company plans to introduce new, cost-effective lithium iron phosphate batteries and to expand its energy storage system business, which is expected to grow at a faster rate than its traditional sectors.
By leveraging these initiatives, LG Energy Solution aims to enhance its market position and adapt to the evolving demands of the global EV market, targeting a resurgence in EV penetration rates and broader adoption of renewable energy solutions.
