[Click eStock] LG Energy Solution Supplies Batteries to Top 3 US Automakers... "Benefiting from Biden Administration"

[Asia Economy Reporter Kwon Jae-hee] Kiwoom Securities maintained its investment opinion of 'Buy' on LG Energy Solution on the 26th, setting a target price of 600,000 KRW. This outlook is based on the expectation that the tight supply and demand situation in the North American battery market will continue until 2030, leading LG Energy Solution to rapidly increase its production share in North America.

The North American battery market is expected to maintain a tight supply and demand balance until 2030. Despite aggressive capacity expansions by battery cell manufacturers including LG Energy Solution, the acceleration of electric vehicle production shifts by original equipment manufacturers (OEMs) and the expansion of U.S. government electric vehicle subsidies are driving this trend.

Furthermore, demand for electric vehicle batteries in North America is expected to steadily increase. Due to rising recommended retail prices for gasoline vehicles and plug-in hybrid electric vehicles (PHEVs), along with the U.S. government's policy to expand electric vehicle subsidies, the share of North American electric vehicle battery demand is projected to grow from 13.5% last year to 17% this year, 21% next year, and 28% by 2030. Additionally, the Biden administration is promoting measures to provide an extra $4,500 subsidy for electric vehicles manufactured in unionized factories and a $500 subsidy for using batteries produced in the U.S.

Lee Dong-wook, a researcher at Kiwoom Securities, stated, "LG Energy Solution supplies batteries to all three major U.S. automakers?GM, Ford, and Stellantis?allowing it to rapidly increase its market share in the U.S. compared to competitors." He added, "With diversification in battery materials and formats such as prismatic and medium-to-large cylindrical batteries, LG Energy Solution is also expected to enter the growing North American energy storage system (ESS) market."