ED Debut of energy solution firm

At stake is how to attain economy of scale

LG Energy Solution was formally launched Tuesday. The company made its debut in the business world, after LG Chem spun off its battery business unit as an independent corporate entity.

During the inaugural ceremony, the company vowed to expand its electric vehicle (EV) battery manufacturing capacity to 260 gigawatts by 2024, more than double that of 2019, to solidify its position as the largest EV battery maker in the world. LG Energy Solution also said it would not stop at producing batteries but also become the world's top energy “solutions” company by providing services throughout the battery lifecycle, such as management, leasing and recharging.

The launch is significant, as the company is the only company in Korea specializing in the battery business. The battery industry has huge growth potential ― so much as to be called the “second semiconductor” sector. Fortunately, Korea has emerged as a global leader in this area by taking the initiative in the early stages.

Korean manufacturers are competing with one another in the global market based on their solid technological edge. The problem is the rapid rise of Chinese competitors. For example, CATL, armed with economies of scale, is rapidly catching up with the Korean frontrunners. Companies here have made a soft landing in the new market but cannot ignore their Chinese rivals.

The key to survival lies in a “super gap” ― maintaining too wide a gulf to be narrowed by competitors. To remain competitive in both technology and scale, the new company should have a clear direction and vision. Korea has long needed a company that will, and can, bet all only on batteries.

LG Energy Solution vowed to increase its sales to 30 trillion won ($27 billion) in four years. It should make bold investments and step up mergers and acquisitions to reach that goal. The company's executives and employees should unite into one and set up an innovative corporate culture in the early stages. We hope LG Energy Solution will become the world's best and most trusted battery company by surmounting various obstacles at home and abroad.