Seoul, South Korea - LG Energy Solution (KRX: 373220) has experienced significant growth in Q2 2023, with key factors influencing its evolution and challenges.
Why It Matters: Their evolving strategy and insights into the global EV market comprehensively examine their current position and future plans.
The Key Points
1. Revenue growth continues: Key Numbers
- 73% year-over-year revenue growth in Q2 2023.
- H1 2023 revenue growth of 86% and operating income growth of 140%.
- Q2 2023 revenue: KRW 8.735 trillion (US$6.82 billion).
- Q2 2023 operating income: KRW 460.6 trillion (US$359.78 million).
2. Growth Drivers
- Rising North American shipments.
- North American growth outpacing China and Europe.
- Consistent revenue growth for six quarters after going public last January.
3. Challenges Reflected in Operating Income
- One-time provision of KRW 151 billion (US$ 117.87 million) for GM recall material costs reduced operating income.
- Operating income was impacted by KRW 110.9 billion (US$ 86.58 million) from U.S. IRA tax credits.
4. Recent global EV market insights
US EV market grew 54.1% from January to May, outpacing China's 47.3% and Europe's 23.9%.
5. H1 performance impacted by:
- Production at GM joint venture plant.
- Increased sales of EV cylinder batteries.
- Cost and yield improvements.
- Upstream supply chain diversification investments.
The Big Picture:
Expanding North American shipments and six consecutive quarters of post-IPO sales growth drove the company's growth.
However, challenges in the form of one-time provisions and U.S. IRA tax credits impacted operating profit.
Current global EV market insights point to growth in the U.S. EV market, with several factors influencing the company's H1 performance.
Amid external uncertainties, global demand is expected to slow down except in North America.
Looking ahead, LG Energy Solution has emphasized product development tailored to target markets, expanding production capacity, and strengthening waste battery recycling systems.
US$1=KRW1280.06
