Europe’s Largest EV Battery Supplier Considers Switching to Static Storage Units
LG Energy Solution’s Poland plant, the largest supplier of EV batteries to the European car industry, is exploring the possibility of entering the static storage market. This move comes as the demand for EV batteries has significantly declined, leading to a projected one-third decrease in revenue for the company this year. The Polish government’s plans to subsidize household storage units make static storage an attractive option for LG Energy Solutions.
The Impact of Declining EV Demand
The slowdown in EV demand has not only affected automakers but also battery suppliers like LG Energy Solutions. As Europe’s leading EV battery supplier, the company is facing a challenging situation with a projected revenue decline of $6.7 billion this year. The high prices of EV batteries and the loss of state subsidies for EVs in various countries have contributed to this decline.
Exploring Static Storage Production
In response to the declining demand for EV batteries, LG Energy Solutions is considering a shift towards static storage production. The company’s plant in Wroclaw, Poland, which employs 6,600 people and accounts for 40% of LG Energy Solution’s global revenue, sees static storage as a potential solution to offset the revenue loss. The Polish government’s plans to subsidize storage units further support this decision.
Benefits of Static Storage
Static storage systems, also known as household storage units, can store solar energy captured during the day for later use. These units are particularly useful during periods when there is no sunlight or during power outages. By entering the static storage market, LG Energy Solutions can leverage its battery expertise and tap into the growing demand for energy storage solutions.
Government Support and Future Plans
The Polish government has already allocated 400 million zloty ($102 million) to subsidize the purchase of storage units. This initiative aims to reduce the country’s reliance on coal and promote the adoption of renewable energy sources. LG Energy Solutions sees this as an opportune time to enter the static storage market and capitalize on the government’s support.
If LG Energy Solutions decides not to pursue static storage production, it will need to find alternative strategies to boost revenue. The company’s challenges have wider implications for Poland, as the country’s first monthly trade deficit in 2024 was attributed to a slowdown in the export of car components, including LG’s EV batteries.
