Electric vehicle ‘Hanpa’… LG Energy Solution suffers a deficit of 2.525 billion won in the second quarter excluding subsidies (supplementary)

Operating profit 1.953 trillion won…down 57.6% from the previous year
GM joint venture 2 plants in operation, AMPC 447.8 billion
Impact of metal price drop and temporary decline in electric vehicle ‘Kasun’ demand overlapping
Efforts to strengthen competitiveness with ESS and LFP, ‘[Edaily Reporter Kim Eun-kyung] LG Energy Solution’s performance in the second quarter of this year was significantly deteriorated due to the impact of Kasun, an electric vehicle, which is a leading industry. LG Energy Solution, which has been aggressively expanding capacity, announced that it will overcome the downturn through adjustment of investment pace and diversification of main product groups.’,
,
, ‘LG Energy Solution (373220) announced through a regulatory filing on the 8th that it recorded sales of 6.1619 trillion won and operating profit of 1.953 trillion won in the second quarter of this year. Sales and operating profit decreased significantly by 29.8% and 57.6% compared to the same period last year. Compared to the previous quarter, sales increased by 0.5%, and operating profit increased by 24.2%.’,
,
,

LG Energy Solution’s Chungju Ochang Plant in Chungbuk Province. (Photo=LG Energy Solution)

, ‘The subsidy under the Advanced Manufacturing Productivity Credit (AMPC) program in the United States amounts to 447.8 billion won. Excluding this amount, it recorded an operating loss of 252.5 billion won, effectively operating in the red. In the previous quarter, operating profit was 157.3 billion won, with AMPC at 188.9 billion won, resulting in an operating loss of 31.6 billion won when excluding the tax deduction amount.’,
,
, ‘The reason for the 137% increase in the IRA subsidy compared to the previous quarter was due to an increase in demand as major customers launched new cars. The substantial production and shipment of Ultium Cells’ second plant in partnership with General Motors in Tennessee, USA, which started operations in the first quarter of this year, also had an impact.’,
,
, ‘The slight increase in second-quarter sales compared to the previous quarter was attributed to active responses to the shipment to North American finished vehicle customers amid the overall weak market demand, including a temporary slowdown in electric vehicle demand, and the expansion of Energy Storage Systems (ESS) sales, according to the company.’,
,
, ‘In terms of operating profit, excluding the IRA subsidy, the operating loss worsened from the previous quarter due to the effect of lower metal prices resulting in reverse income effect (profit decrease due to the time lag of raw material input) and continued pressure from fixed costs due to low capacity utilization rates. However, including the IRA subsidy, operating profit improved from the previous quarter due to the expansion of sales in North America.’,
,
, ‘LG Energy Solution continues its efforts to fundamentally strengthen competitiveness in the electric vehicle Kasun this year. Earlier, Kim Dong-myeong, CEO of LG Energy Solution, emphasized the need for investment pace adjustment in a message sent to employees on the 4th, stating that “inefficiencies have arisen in areas such as manpower, facilities, and procurement due to aggressive orders and business expansions so far,” and that “now is the time for necessary investment pace adjustment.”‘,
,
, ‘LG Energy Solution is expediting product portfolio diversification to overcome the crisis. Earlier this month, it successfully expanded its influence in the low-cost battery market by signing a large-scale supply contract for lithium iron phosphate (LFP) batteries for electric vehicles with Renault. This is the first time LG Energy Solution has entered into a vehicle LFP battery supply contract among domestic battery companies. The electric vehicle LFP market is dominated by Chinese companies to the extent that it is not an exaggeration to say that it is the veritable backyard of Chinese battery companies.’,
,
, ‘It is also pushing ahead with the conversion of some global factory electric vehicle lines to ESS. An official from LG Energy Solution stated, “The ESS market is steadily growing unlike the sluggish electric vehicle market in the short term, so through line conversion, we can not only actively respond to demand but also increase the operation rate of the current factories and reduce fixed costs.”‘,
,
,

LG Energy Solution Quarterly Performance Trend. (Data=LG Energy Solution)

,
,
,