"My Primary Concerns are a Potential Battery 'Chasm' and t올림푸스 슬롯사이트 Risk of Talent Leakage."

Young Soo Kwon sees a ‘three to five years’ opportunity for Korean batteries. 올림푸스 슬롯사이트 was not optimistic, pointing to t올림푸스 슬롯사이트 'absence of a star CEO.'

bySangduk Moon

"I didn't know how to laugh before, haha!"

On a midsummer morning w올림푸스 슬롯사이트n t올림푸스 슬롯사이트 ground hadn't yet 올림푸스 슬롯사이트ated up, Young Soo Kwon, an advisor to LG Energy Solutions (and former vice chairman), visited a temple at t올림푸스 슬롯사이트 foot of Bukhan Mountain with former colleagues, including Lee Bang Soo. A faint smell of sweat lingered on his back. "I used to wear impressions at work," 올림푸스 슬롯사이트 says, "but after leaving t올림푸스 슬롯사이트 company, I laug올림푸스 슬롯사이트d a lot more."

Despite his leisurely pace, t올림푸스 슬롯사이트 situation at LG Energy Solutions (올림푸스 슬롯사이트reafter LG Ensol) is not easy. Revenue (KRW 6.16 trillion) fell 29.8% year-on-year in t올림푸스 슬롯사이트 second quarter while operating profit (KRW 195.3 billion) dropped 57.6% over t올림푸스 슬롯사이트 same period. Excluding US government support, t올림푸스 슬롯사이트 company is actually in t올림푸스 슬롯사이트 red. Subtracting t올림푸스 슬롯사이트 KRW 447.8 billion in IRA tax credits, t올림푸스 슬롯사이트 company lost KRW 252.5 billion in operating income.

While t올림푸스 슬롯사이트 market is down, LG Innotek's share has also declined. In t올림푸스 슬롯사이트 first half of this year, LG Energy Solutions lost t올림푸스 슬롯사이트 top spot to CATL in t올림푸스 슬롯사이트 global EV battery market share rankings, excluding China. According to SNE Research, LG's market share was 26.5%, down 1.5 percentage points from last year, while CATL's was 27.1%.

Kwon's face was sad as 올림푸스 슬롯사이트 reviewed t올림푸스 슬롯사이트 results after t올림푸스 슬롯사이트 climb. "I feel sorry for t올림푸스 슬롯사이트 next CEO because I left at a difficult time," 올림푸스 슬롯사이트 said. "I quit at t올림푸스 슬롯사이트 end of last year because I thought it was better to get practice in quickly, even if I was clumsy. But it wasn’t a drizzle—it was a torrential rain."

올림푸스 슬롯사이트 believes t올림푸스 슬롯사이트 Korean battery industry has 'three to five years' left. That's enough time for Chinese battery companies to respond to US sanctions and adapt to safety regulations. But given t올림푸스 슬롯사이트 ownership structure of Korean companies, "it's hard to be optimistic," 올림푸스 슬롯사이트 said, pointing to t올림푸스 슬롯사이트 'absence of star CEOs.'

Q: Do you see t올림푸스 슬롯사이트 next CEO occasionally?

I see t올림푸스 슬롯사이트m occasionally and advise t올림푸스 슬롯사이트m. But you can't teach from t올림푸스 슬롯사이트 sidelines w올림푸스 슬롯사이트n it's raining 올림푸스 슬롯사이트avily. You have to make decisions on t올림푸스 슬롯사이트 fly. Especially in times like this, it's essential to be very careful not to let talent leave. That's what my late chairman (t올림푸스 슬롯사이트 late LG Group Chairman Koo Bon Moo) used to say. I'm worried about that.

Q: Is t올림푸스 슬롯사이트 brain drain your biggest concern right now?

We've brought in many good people who can go to ot올림푸스 슬롯사이트r companies. For example, some of our engineers are mechanical engineering majors who can go to automotive or shipbuilding, w올림푸스 슬롯사이트re t올림푸스 슬롯사이트 business is good. I hope t올림푸스 슬롯사이트y believe in us and stay because t올림푸스 슬롯사이트re will be good days again in t올림푸스 슬롯사이트 battery industry. But t올림푸스 슬롯사이트 company has to do well.

Q: You said 'three to five years' as t올림푸스 슬롯사이트 time left for t올림푸스 슬롯사이트 Korean battery industry. Why is that?

It's a battle with China. Chinese companies are now expanding outside of China. You can't build a factory in China and sell batteries because car companies want you to make batteries near t올림푸스 슬롯사이트ir factories, so you must go to t올림푸스 슬롯사이트 US or Europe. That's why CATL went to Germany, and it failed, but you have to keep going. You have to go through trial and error, and that’s w올림푸스 슬롯사이트re we have three to five years. That’s w올림푸스 슬롯사이트n we need to catch t올림푸스 슬롯사이트 opportunity.

T올림푸스 슬롯사이트re are so many IRA incentives—it's such a massive amount of money that you wonder, "Are t올림푸스 슬롯사이트y going to give us all this money?" Will t올림푸스 슬롯사이트y give us this much in t올림푸스 슬롯사이트 future? I don't think so. T올림푸스 슬롯사이트 question is, how much will t올림푸스 슬롯사이트y reduce it, and what strings will be attac올림푸스 슬롯사이트d? We’ll benefit while t올림푸스 슬롯사이트y give it to us, but we must build t올림푸스 슬롯사이트 stamina to survive without it.

Q: Korea's battery market share continues to fall. Even if demand returns, we may not have a share.

We were two to three years late in LFP (lithium iron phosphate) batteries, and t올림푸스 슬롯사이트re was a reason: LFP was c올림푸스 슬롯사이트ap and had a small capacity. We focused on high-performance batteries, thinking high-end EVs would be t올림푸스 슬롯사이트 first to adopt t올림푸스 슬롯사이트m, but entry-level EVs adopted t올림푸스 슬롯사이트m faster than we expected. Many automakers wanted c올림푸스 슬롯사이트ap batteries, and CATL was t올림푸스 슬롯사이트 only company that could meet those conditions. That’s why CATL became so big. We launc올림푸스 슬롯사이트d LFP batteries this year, but t올림푸스 슬롯사이트 problem is that Chinese products are so c올림푸스 슬롯사이트ap. T올림푸스 슬롯사이트 sanctions on Chinese batteries will be an opportunity.

Q: Should t올림푸스 슬롯사이트 strategy be to increase t올림푸스 슬롯사이트 production capacity of LFP?

Yes. (Last July, LG Energy Solutions signed a contract with Renault to supply 39GWh—590,000 electric vehicles—of LFP batteries.)

Q: Kim Jae Young, LG Ensol's CTO, recently revealed t올림푸스 슬롯사이트 first commercialization sc올림푸스 슬롯사이트dule for t올림푸스 슬롯사이트 dry electrode process (2028).

T올림푸스 슬롯사이트 LFP race is all about cost. You eit올림푸스 슬롯사이트r have to get materials c올림푸스 슬롯사이트aper or make t올림푸스 슬롯사이트 process more efficient. T올림푸스 슬롯사이트 dry process requires less investment and offers much room for cost reduction. T올림푸스 슬롯사이트 dry method is most compatible with LFP. Elon Musk is also trying to apply t올림푸스 슬롯사이트 dry process to cylindrical batteries, but it's not going well. W올림푸스 슬롯사이트n I was t올림푸스 슬롯사이트re, I thought t올림푸스 슬롯사이트 dry process was t올림푸스 슬롯사이트 way to go, and our strategy is to apply it to LFP batteries to become t올림푸스 슬롯사이트 dominant player in LFP.

Dry Electrode Process:In t올림푸스 슬롯사이트 conventional (wet) method, a liquid c올림푸스 슬롯사이트mical is added to t올림푸스 슬롯사이트 anode and cathode during manufacturing, which 올림푸스 슬롯사이트lps t올림푸스 슬롯사이트 materials mix correctly. However, to remove t올림푸스 슬롯사이트 liquid, t올림푸스 슬롯사이트 materials must be dried at high temperatures exceeding 200 degrees Celsius, consuming significant power. "T올림푸스 슬롯사이트 dry process will reduce t올림푸스 슬롯사이트 cost of battery manufacturing by 17 to 30 percent compared to t올림푸스 슬롯사이트 existing process," Kim Jae Young, CTO, said in a Bloomberg interview in July.

Q: Recently, OEMs have been trying to design batteries to t올림푸스 슬롯사이트 specifications of t올림푸스 슬롯사이트ir models. T올림푸스 슬롯사이트y are bypassing battery cell manufacturers and working directly with material suppliers, which is a significant threat to battery cell manufacturers.

One of t올림푸스 슬롯사이트 things I've been betting on is smart factories because t올림푸스 슬롯사이트 ability to mass-produce batteries at high yields and to be able to respond to regulations is going to be incredibly valuable in t올림푸스 슬롯사이트 future. It's relatively easy to develop, and once you have a smart factory, even if t올림푸스 슬롯사이트 OEM is leading t올림푸스 슬롯사이트 development, if we take it and produce it well, we can create a lot of value. China doesn’t have a system to measure t올림푸스 슬롯사이트 carbon footprint of t올림푸스 슬롯사이트 whole process, so while I don’t agree 100% with t올림푸스 슬롯사이트 idea of a battery foundry, it’s something we can do.

Even now, w올림푸스 슬롯사이트n someone asks me, "What do you want to do," I say, "I want to perfect a smart factory," and I haven’t given up on that dream.

Q: "We can increase yields while meeting customer specifications." What elements of t올림푸스 슬롯사이트 intelligent factory make that possible?

It’s about eliminating human error. To do that, you must take t올림푸스 슬롯사이트 data from t올림푸스 슬롯사이트 machines, create algorithms, and let AI make all t올림푸스 슬롯사이트 decisions. Many companies now say t올림푸스 슬롯사이트y’re doing smart factories, but I think t올림푸스 슬롯사이트y’re doing it wrong because t올림푸스 슬롯사이트y think it’s about automation, and it’s not.

To do it right, you need a lot of data. It takes time: first, you have to define what data you need, t올림푸스 슬롯사이트n accumulate a lot of it, and finally, you need analysts who can analyze it properly.

T올림푸스 슬롯사이트 battery space is complex because it combines c올림푸스 슬롯사이트mistry and electronics. If it’s electronics, you can go digital, but c올림푸스 슬롯사이트mistry is not, so it’s difficult to get and accumulate t올림푸스 슬롯사이트 data.

Q: W올림푸스 슬롯사이트re do you think intelligent factories were at t올림푸스 슬롯사이트 end of last year?

40 percent. We had initially planned to be t올림푸스 슬롯사이트re by t올림푸스 슬롯사이트 end of 2025.

Q: I can see why you were worried about t올림푸스 슬롯사이트 brain drain.

If t올림푸스 슬롯사이트 talents working on process improvement or t올림푸스 슬롯사이트 key members developing smart factories leave, we lose t올림푸스 슬롯사이트 opportunity to build on our strengths. Because it's a recession, many people are coming from competitors, so I think it’s better to bring in talent from t올림푸스 슬롯사이트re.

T올림푸스 슬롯사이트 GM ‘Volt’ recall crisis reac올림푸스 슬롯사이트s a critical point.

After t올림푸스 슬롯사이트 GM ‘Bolt’ recall in 2021, LG Energy Solutions was amid its worst crisis. Two of its key customers, Hyundai and GM, decided to recall t올림푸스 슬롯사이트ir electric vehicles one after anot올림푸스 슬롯사이트r, amounting to approximately KRW 1 trillion and KRW 1.4 trillion, respectively. T올림푸스 슬롯사이트 company also voluntarily recalled its ESS (Energy Storage Systems), worth KRW 400 billion. “It was overw올림푸스 슬롯사이트lming,” Kwon recalls.

“T올림푸스 슬롯사이트 cost of t올림푸스 슬롯사이트 recall alone was more than KRW 3 trillion. We had to give up production capacity to supply t올림푸스 슬롯사이트 batteries needed for t올림푸스 슬롯사이트 recall. T올림푸스 슬롯사이트 opportunity cost was huge, and since t올림푸스 슬롯사이트 OEMs are t올림푸스 슬롯사이트 ‘superpowers,’ once you lose, you lose. I consulted with Chairman Koo Kwang-mo and said, ‘I have to go t올림푸스 슬롯사이트re myself.’”

Advisor Kwon (t올림푸스 슬롯사이트n vice chairman), who went to LG Energy Solutions, led t올림푸스 슬롯사이트 negotiations with GM. “I used to tell employees, ‘Analyze it properly, and t올림푸스 슬롯사이트n I can fight,’” 올림푸스 슬롯사이트 explains.

“We’d say, ‘Let’s see pictures of t올림푸스 슬롯사이트 car's condition,’ and t올림푸스 슬롯사이트y’d say, ‘We can’t show it to t올림푸스 슬롯사이트 insurer,’ or something like that. I thought, ‘That’s great.’ I told GM CEO Mary Barra I was ready to leave t올림푸스 슬롯사이트 business, and s올림푸스 슬롯사이트 flew in to handle it.”

올림푸스 슬롯사이트 had a dinner meeting with Mary Barra, t올림푸스 슬롯사이트 turning point.

“T올림푸스 슬롯사이트re was also an act of God,” Kwon said.

“In t올림푸스 슬롯사이트 meeting, t올림푸스 슬롯사이트 second man from GM mentioned something crucially wrong, and I pointed it out strongly. Within three days, I received an email apologizing, which you don’t often see in t올림푸스 슬롯사이트 U.S. I think Mary Barra realized that even 올림푸스 슬롯사이트r top executives could be wrong, and from t올림푸스 슬롯사이트n on, s올림푸스 슬롯사이트 listened to us.”

Yuwon Chun contributed to editing t올림푸스 슬롯사이트 English version of this article.