LG Energy Solution is actively expanding its business in North America. Following its success in electric vehicle batteries, the company is now accelerating its Energy Storage Systems (ESS) business. The growth of ESS is closely tied to the increasing generation of renewable energy.
According to the recent quarterly report disclosed on the Financial Supervisory Service’s Electronic Disclosure System in South Korea, LG Energy Solution’s ESS solution company, LG Energy Solution Vertech, recorded sales of 1.097 trillion won (US$833.5 million) from the first to the third quarter of last year. This is a 289.0% increase compared to the same period the previous year, which recorded 282 billion won. Additionally, in the third quarter of last year, the company turned a profit, achieving a net income of 81 billion won in contrast to a net loss of 93 billion won during the same period the previous year.
In the U.S., LG Energy Solution is expanding its influence in the electric vehicle battery market through investments in production facilities. The company has established joint ventures in the U.S. with major automakers such as Hyundai Motor Company, GM, Stellantis, and Honda, securing eight out of the top ten car manufacturers as clients.
Moreover, the company is accelerating its efforts to capture the U.S. ESS market and aims to triple its ESS division’s revenue within five years.
According to the U.S. Energy Information Administration (EIA) and market research firm Statista, the U.S. ESS market is projected to grow to US$8.261 billion by 2025.
LG Energy Solution decided to invest 3 trillion won early last year to establish a dedicated ESS factory in Arizona in the U.S. With a capacity of 16 GWh, the plant aims to start mass production by 2026.
In February 2022, after acquiring the U.S. ESS System Integration (SI) specialist, NEC Energy Solutions, LG Energy Solution established LG Energy Solution Vertech. The company provides all solutions related to ESS, including battery supply, and is wholly owned by LG Energy Solution.
Since its establishment, LG Energy Solution Vertech has secured ESS grid projects in the U.S. with a combined capacity of 10 GWh by the end of last year. This capacity is the total of more than ten power grid projects ordered so far. All projects involve lithium-ion batteries manufactured by LG Energy Solution and system control systems, with Vertech’s proprietary software Aeros being implemented.
Meanwhile, according to market research firm SNE Research, LG Energy Solution ranked fourth in the global ESS market last year with a 7.5% market share.