LG New Energy acquires Nippon Electric's energy storage manufacturers to officially enter the field of energy storage systems.

On February 17th, Battery Network learned from LG New Energy officials that the company completed the acquisition of NEC Energy Solutions, a US-based energy storage system manufacturer of Nippon Electric Co., Ltd. (NEC), with the aim of entering the field of energy storage system (ESS).

According to the agreement, LG New Energy will set up a new company under the name of LG Energy Solution Vertech, which will be responsible for the planning, design and maintenance of energy storage system integration projects, and integrate necessary equipment, including battery and power conversion system (PCS), to provide services for LG new energy optimization energy storage business.

Data show that, NEC Energy Solutions, established by Nippon Electric Co., Ltd. after acquiring the energy storage system integration department of A123 Systems in 2014, has achieved an average annual growth of 60 per cent since 2018, with revenue of $207 million in 2020. The company's AEROS control system and its proprietary system-level energy storage software platform are widely recognized in the ESS business.

The battery network learned that SNE Research, a South Korean research firm, had predicted that the global ESS market would grow at an average annual rate of 35 per cent. The ESS industry will be 11 gigawatt hours in 2019, 20 gigawatt hours in 2020, and is expected to reach 302 gigawatt hours by 2030.

"through this deal, LG Energy Solutions will accelerate its energy storage business and eventually better provide our customers with a more comprehensive ess plan to meet growing demand," said Youngsoo Kwon, chief executive of LG Energy Solutions. "We believe that by improving our competitiveness in quality, we can expand our ESS business and eventually become a global leader in the industry."

It is worth noting that, according to the latest data released by South Korean research agency SNE Research on Feb. 7, the total battery capacity of electric vehicles registered around the world in 2021 was 296.8GWH, more than double that of the previous year. Among them, LG new energy followed the Ningde era, maintaining the second place in terms of installed capacity 60.2GWh, with an increase of 75.5% over the same period last year and a market share of 20.3%.

In addition, LG New Energy recently announced its results for the fourth quarter and the whole year of 2021. Driven by strong demand for electric vehicle soft package batteries and cylindrical batteries, the company achieved revenue of 4.44 trillion won in the fourth quarter of 2021, an increase of 10.2% month-on-month and 2% year-on-year. Operating profit was 76 billion won (US $63.5 million). The battery industry was booming in 2021, driven by strong demand for electric vehicles and the cylindrical batteries they needed, with LG New Energy's full-year revenue of 17.85 trillion won, up 42 per cent year-on-year, operating profit of 768.5 billion won and operating margin of 4.3 per cent.

Looking ahead to 2022, LG New Energy expects revenue to reach 19.2 trillion won in 2022, an increase of 8% over the same period last year, exceeding the expectation of steady growth in the electric vehicle market. Excluding the impact of emergencies on performance, the company's annual revenue will grow by 14 per cent year-on-year.