LG Ensol President Committed to "Qualitative Growth and Direct Confrontation" vs. U.S. Partner Proposing Subsidy Sharing

The new leadership of LG Energy Solution under Kim Dong-myung officially launched on the 1st amid a crisis originating from the United States.

Kim Dong-myung, the newly appointed CEO, stated in his inaugural speech, "We intend to implement a winning strategy that drives qualitative growth," and added, "Let us confront competitive threats head-on and secure an overwhelming competitive advantage."

However, the Kim Dong-myung administration faced new challenges from day one. It was revealed on the same day that General Motors (GM) in the U.S. suddenly demanded 85% of the subsidies provided by the U.S. government. GM pressured LG Energy Solution to share the Advanced Manufacturing Production Tax Credit (AMPC) that LG Energy Solution was set to receive from the U.S. government in exchange for investing trillions of won in the North American region.

GM reportedly requested LG Energy Solution to distribute up to 85% of the AMPC subsidies received through their joint venture, Ultium Cells. GM holds a 50% stake in the joint venture, meaning they demanded more than their equity share.

Kim Dong-myung, CEO of LG Energy Solution
[Photo by LG Energy Solution]

The demand for AMPC redistribution was anticipated. Initially, the industry expected GM to request according to the joint venture equity ratio (50:50), but GM’s demand exceeded their share. LG Energy Solution received 426.7 billion won in AMPC from the first to third quarters of this year. It is projected to exceed 1 trillion won next year. LG Energy Solution is already proceeding with local investments, making it difficult to outright reject GM’s demand.

The battery industry is closely watching whether the new CEO Kim can become a savior. Professor Park Cheol-wan of Seojeong University said, “He needs to quickly erase the traces of his predecessor and rebuild the company from scratch.” He added, “Qualitative growth must be demonstrated with numbers,” and emphasized, “The ratio of R&D investment to sales should be increased two to three times from the current level while simultaneously improving profitability.”

CEO Kim emphasized creating an achievement-based organizational culture. He said, "Based on strong execution, we must secure an overwhelming competitive advantage that no one can challenge and create the era of EnSol 2.0 that achieves true qualitative growth," and added, "No matter how good a company is, it cannot survive if it does not continuously produce valuable results." He continued, “Going forward, I and the company intend to play the role of a 'Sherpa' to support your challenges.”