Automakers aren’t the only ones affected by the slowdown in EV demand; battery suppliers like LG Energy Solutions are also feeling the pinch. To counter declining profits, LG Energy Solutions is exploring new directions for its battery expertise.
The Polish division of LG Energy Solutions, the largest EV battery supplier to the European car industry, employs 6,600 people and accounts for 40 percent of the firm’s global revenue. However, with EV battery demand declining due to high prices and reduced state subsidies, the Wroclaw-based plant anticipates a one-third drop in revenue this year, down to $6.7 billion, according to Bloomberg.
“We are considering developing LG Energy Solution Wroclaw toward energy storage,” said LG’s Joanna Silska. “Energy transformation is crucial and inevitable for European economies, therefore we’re examining the potential for investments in new manufacturing capacities.”
While LG already offers static storage systems globally, a transition to producing these units in Poland is timely. The Polish government recently announced subsidies for storage units, which can store solar energy for use during non-sunny periods or power outages.
Poland has allocated 400 million zloty ($102 million) to subsidize storage unit purchases, with plans to expand the scheme to reduce coal dependence.
If LG doesn’t pursue static storage, it must quickly find alternative revenue sources, as the company’s struggles impact Poland’s economy. Bloomberg reports that Poland’s first monthly trade deficit in 2024 was attributed to a decline in car component exports, including LG’s EV batteries.
Source: Bloomberg