The EV battery manufacturer LG Energy Solution expects sales to increase by 8% in 2022

The EV battery manufacturer LG Energy Solution expects sales to increase by 8% in 2022. 

SEOUL: The battery maker LG Energy Solution Ltd stated on Tuesday that it intends to boost sales by 8 percent by 2022. 

The company expects to see a rise in demand for electric car (EV) batteries, as the global shortage of chips will ease later in the year.

The recently publicized South Korean firm, which makes up five percent of the global market for EV batteries, went to profits in the November-December quarter, despite the chips shortage that affects automakers caused less than expected battery demand.

LGES The company, which was ranked as South Korea’s second-largest listed firm during the largest-ever IPO, posted an operating profit of 76 billion won ($63.5 million) in its fourth-quarter earnings, the company said in its first earnings report.

This is in contrast to an estimated profit of 150 billion won estimated by two analysts surveyed by Refinitiv and 479 billion won during the same period one year ago.

Analysts pointed out that the shortage of chips in the world has impacted the demand of automakers, which affected the company’s results. 

In addition, LGES competitors SK On and Samsung SDI Co Ltd have reported the same effect on battery demand in the quarter.

The company’s revenue that provides Tesla Inc and General Motors Co increased by 2percent to 4.4 trillion dollars from a year ago.

LG stated that it is establishing the capital expenditure budget for this year in the range of 6.3 trillion won. 

This is an increase of 58% from the year-ago to finance capacity expansion in its factories across the globe to meet the demand for its battery.

“LG will continue to move forward with bold investment plans needed in the long run. We are confident our business model of preparing for the future will help us lead the industry,” LGES chief executive officer Youngsoo Kwon said in a statement.

In January of this year, LG had a spectacular first-ever market entry and soared to a market capitalization of $98 billion. It is the second largest with Samsung Electronics Co Ltd on the local bourse. 

This reflects the optimistic outlook for the electric vehicle battery companies.

The stock has since gained an additional 8.5 percent and another 3.5 percent on Tuesday against an overall 1.2 percentage increase in the market. 

Global EV sales, which are estimated to be 2.5 million vehicles by 2020, are predicted to rise more than 12-fold and reach 31.1 million by 2030. 

According to a consultant, Deloitte, these represent more than a third of the new vehicles sold.

In January of this year, LGES said it plans to invest $2.6 billion along with GM to construct its third battery facility in the United States, aiming to attain a capacity of around fifty gigawatts (GWh) in batteries before 2025. 

This is enough to supply 700,000 electric vehicles. In addition, both companies are currently developing two joint battery plants within Ohio in Ohio and Tennessee.