LG Elec. targets $12 bn sales from EV components within 3 yrs

Chief executive officer Cho Joo-wan [Source : LG Electronics]

LG Electronics Inc. is aiming to achieve 15 trillion won ($12 billion) in annual sales from electric vehicle (EV) components business alone within three years, starting with over 10 trillion won this year, according to its chief executive officer Cho Joo-wan on Friday.

In a press briefing at Consumer Electronics Show (CES) in Las Vegas, Cho unveiled plans to speed up its Vehicle component Solutions (VS) business this year, which has been generating operating profit since the second quarter last year.

The VS business - launched in 2013 - is estimated to have generated some 30 billion won in operating profit in the fourth quarter last year. Sales is projected to hit more than 10 trillion won this year.

The 15 trillion won revenue target within three years represents almost one fifth of the company’s current total revenue.

The CEO’s outlook comes after the South Korean tech company Friday reported an estimated 65.5 billion won in fourth-quarter operating profit, down a whopping 91.2 percent from a year ago.

For full 2022, the company estimated its operating profit at 3.54 trillion won, down 12.6 percent from 2021 over sales of more than 80 trillion won.

Touching on the disappointing Q4 operating profit, Cho said the situation will get better in the first quarter as soaring logistics costs began to come down from late last year.

Despite challenging external conditions, LG Electronics will not reduce investment this year.

“We will only increase investment for smart factory transformation as factory intelligence will lead to an increase in productivity and competitiveness,” Cho said.

LG Electronics is further expanding its portfolio to car charging solution business after acquiring a company specializing in EV chargers.

Cho fell short of talking about the possibility of cooperation with Apple Car, but he emphasized that “we have enough portfolio to collaborate with an original equipment manufacturer (OEM) of any vehicle.”