LG Energy Storage Systems: Where everything connects in the world of LG

The transcription of the video is below.

Introduction

Kerim: Hi, everyone. This is Kerim, Kerim Baran with SolarAcademy. Today, I have with me Chris Ahn of LG Electronics. Chris is a senior vice president of LG Electronics U.S.A. responsible for the Home Appliances Division at LG Electronics. And he’s got a very unique background. He’s been with LG for over 25 years, if I am correct.

And so we’re going to talk a little bit about his tenure at LG as a company and LG ESS, the product, the energy storage system product of LG and how everything connects in the world of LG, and what makes them unique in the battery space for residential and beyond solutions in the world.

Chris Ahn’s Background at LG: From R&D to Business Leadership in HVAC and Batteries

Kerim: Welcome, Chris. Good to have you.

Chris: Yeah, thank you. Thanks for the introduction. Yeah, my name is Chris Ahn. Just call me Chris. And then I have started my career in LG. In fact, this is my first company. And it’s been like…

Kerim: Yeah, first and last employer.

Chris: Right, right, almost 25 or 26 years. So I’ve started with R&D, engineers in the R&D center after my master’s degree in engineering.

Kerim: Yeah.

Chris: And which is a different background, compared with current position. So I’ve spent like 4 years in there, and I have decided to explore another…

Kerim: This is in the R&D facilities back in Korea, correct? 

Chris: In Korea, correct. Yeah. 

Kerim: Yeah. Yeah. Okay. 

Chris: So after 4 years, I was like, “I’ll try to explore another experience.” So I’ve decided to go to overseas sales and marketing. It was not easy, but finally, I’ve done quite a good job, and then I was dispatched to be product manager of LG Dubai Operation. This is my first overseas experience. So I’m taking care of HVAC business over there for 6 years.

Kerim: Yeah. Wow.

Chris: And then I came back to Korea again, and I moved to the United States in 2013. So for 5 years I’ve been taking care of HVAC business as well.

Kerim: Again, with LG, the HVAC business unit yeah, in the US, yeah.

Chris: And then I went back to Korea, and I was head of LG Energy Storage Solution business, globally. So I’ve spent 4 years and that’s my first experience for energy business. Yeah. After that, yeah, I went back to the US again, 3 years ago. So I became the head of HVAC and ESS business in the United States. So this is what I am. Yeah. 

Kerim: Yeah. Got it. Great. Well, thank you for that background. 

LG Group & LG Electronics business overview

Can we also talk a little bit about LG, and how big it is, and what a vast company it is? I mean, from our previous conversations, I know a little bit. 

Chris: Yeah, yeah.

Kerim: So can you give us a picture of like LG group, the different big divisions, like chemical, electronics, all of that? 

Chris: All right. I’ll explain briefly. LG, we have like LG group lead by a holding company. And we have LG Electronics and we have LG Chemical, which is known as, that belongs to LG Energy Storage. And then we have LG Telecommunication. So these are 3 big group of companies belonging to LG Holdings. 

Kerim: And this is a $150B a year business.

Chris: Yeah, that’s $150B last year, I think. That’s revenue. But I mean LG Electronics, so I’ll explain. 

Kerim: Which is only 63 billion. 

Chris: Yeah, which is only 63 billion. 

Kerim: Okay, got it. Yeah. 

Chris: Yeah. So that’s the LG Electronics. And then we have in LG Electronics, we have 4 different companies. One is home appliance and air conditioning, which is where I belong to.

Kerim: Which is where you are, so yeah. 

Chris: HVAC and ESS business. 

Kerim: The residential ESS business energy storage business that is coupled with solar falls in there. Yeah. 

Chris: Exactly. Yeah. 

Kerim: That’s on home appliances. 

Chris: Home appliance and air conditioning. We call it H&A company.

Kerim: Yep. Yep. 

Chris: And then another one is Home Entertainment Company, which is TV vision.

Kerim: Yeah, where everybody has that. Yeah. 

Chris: Yeah, right. Another one is business solution, which is commercial display. And then uniquely, recently we have started EV charger business under that company.

Kerim: Okay, that’s under business solutions. Yup.

Chris: Yeah. And the last one is the vehicle component.

Kerim: Yup.

Chris: Like we are providing all kinds of display in the car pickup and even power train and power motors for EV cars. So that’s kind of unique, the company that’s providing the EV industry. So these 4 companies belong to LG Electronics. And then, a separate entity of LG Electronics, LG Display and LG Innotek are the companies that sell display to, LG Electronics as well as other brands, and Innotek, providing iPhone camera module over 50% total. 

Kerim: Wow. Yeah. Like 50% of iPhones have LG cameras in them.

Chris: Oh. But the number, I need to make sure of it. 

Kerim: You verify. 

Chris: It could be wrong.

Kerim: Yeah. 

Chris: Probably, a large portion.

Kerim: Yeah. Got it. Wow.

LG Electronics Energy Storage Systems as a hub and management system in the context of LG Home Electrification

Our topic today is LG ESS. So can you tell us a little bit about that product and also how it fits in that world of LG’s home appliances division with the HVAC products as well as probably the heat pumps and the other heater, water heater. You have a slew of products under home appliances. So how did LG ESS come to fruition, and what makes it unique? And let’s talk a little bit about that.

Chris: Yeah. So when I say LG ESS is under home appliance and air conditioning company,  there’s a bit of curiosity sometimes. People are wondering, but when it comes to home electrification, I do believe LG is the only company that provides everything from appliances and then heat pump, HVAC and heat pump water heaters. And even EV chargers. But the one thing that we were missing was energy storage. 

I believe in the future, all kinds of devices need to be integrated so that we can maximize energy efficiency. This is a way that we can reduce electricity because like gas and pure fossil, will not be able to supply anymore in the near future. So electricity, only the energy resources can operate all kind of devices.

But if we cannot integrate and manage properly, there’s going to be a disaster. So we end up needing something to manage all kinds of devices and technology. That’s the LG ESS. So this is kind of a hub of the platform. So with this package, we can go to the market and to the customers and provide this LG home energy package solution.

So yeah, long story short, this is the differentiation from other companies. There are many. Yes, there are providers, but they don’t have kind of,… 

Kerim: Yeah, they don’t have the other appliances. They don’t have the washer, dryer or the heat pump or the water heater or the HVAC. 

Chris: Exactly, yeah.

Kerim: And only you guys have a whole series of different products.

LG ESS ThinQ App Platform – Integrating LG ESS to all other LG devices at the home

So then, you guys obviously are now inserting a storage, a battery solution into the home and then that connects all the appliances. And does that come with an application as well? Is that the ThinQ?

Chris: Right. Yeah. We do have like, the app platform. We call it ThinQ, LG ThinQ. So it connects LG devices at home including ESS. So we already integrated everything, and we keep developing the program, or the capability that ESS can manage all kinds of devices with the algorithm, which is the best scenario that reduces the energy consumption. So this is going to be the output image, but this is one that we are going to develop on our platform.

What makes LG Electronics Home 8 Energy Solution System unique?

Kerim: So, what besides that major differentiation of being a full-on home electrification solution and a very well-known brand LG, what other like unique one-to-one differentiation key features, benefits can we talk about in LG ESS’s positioning, vis a vis, all the other brands of home batteries that are out there?

There’s probably a dozen others. Everybody seems to know Tesla, but then all the major inverter manufacturers nowadays, SolarEdge, Enphase, probably all the others have some residential storage solution, many other standalone battery companies. So what makes LG batteries unique?

Chris: Yeah, that’s a very good question. We are not 100% perfect, but I would say when we designed this product, we tried to develop the industry’s largest capacity ESS. So we have developed and we have introduced 14.4 kilowatt-hour battery, which is the industry’s largest

Kerim: Yeah, most of them are around 13 or 12, if I am… 

Chris: Yeah. Yeah. Next level of 13.5 I believe.  

Kerim: And can you put, can you stack a few of them on top of each other to get more power as well? 

Chris: Yeah. Exactly. We can connect four ESS. Yeah, four. Our brand name is Home 8 LG ESS. So we can stack like four.

Kerim: That’s enough for two full days of a typical American household with no sunlight.

Chris: Exactly. So we are trying to develop the industry’s largest capacity ESS. This is our Home 8 right now. And our battery module divided by four, so it’s very easy to carry. We can take out and then move individually and go to the site and put on our closure box. And then we just put in there and just close the panel. So it’s very easy to handle. 

And another one is we have like a smart energy box. We have one for inverter and battery, the package, and we have a smart inverter box. There is, HDMI screen, which can give the full support for installers when they are commissioning. While installing the ESS, they can work without any connected internet. There’s no need to connect to the internet. They can do whatever they want in that HDMI screen. 

So that’s the main differentiation from others. Others, they need to connect with the Wi-Fi and internet. And during the installation, if you lose the signal, then they need to read again. So we learned from that. So we put that kind of capability in our SCB for easy commissioning.

Kerim: Yeah. So the labor time at the house installing becomes much shorter, I assume. 

Chris: Right, right. 

Kerim: Do you guys keep track, keep metrics on that? Or can you publicly share some installation time metrics and things like that?

Chris: We internally try to calculate, but it varies in every home, so we cannot publish like officially, but we try to use, when we meet with the customers and explain,

Kerim: Obviously, that is one important metric for installers to be able to go in and get in and out quickly. And the fact that your batteries come with modules, you said four modules per battery. So that makes it easy to carry, move around, and install. And then the fact that it does not need an internet connection during installation makes that install time much shorter, I guess. Yeah. Got it. 

LG Electronics ESS’s go-to-market approach. How do installers and consumers get access to LG ESS batteries? 

And for those who are looking too, like, what do your go-to-market channels look like? Where and how can a homeowner eventually buy an LG ESS battery? Or an installer, how do they get enrolled in your programs to sell it?

Chris: Yeah, that’s really, really important, the agenda. So a typical distribution channel, definitely we need to work with distribution partners. And then the most important thing is installers. They need to demand from the distributor. Like they need to say, “I need the LG Home 8.” That’s the distributor that’s interested to buy from us. Right?

Kerim: Right.

Chris: So we have a process through the distributor, and then we have operating the program, the LG pro dealers, which are the installers, currently, but not that many. We have around 200 LG pro dealers, nationwide.

Kerim: Okay. 

Chris: So we are providing our training and kind of financing, supporting program as well.

Kerim: Wow.

Chris: So that’s kind of the go-to-market strategy as well. Distribution and installers. And another thing is work with a utility company for, a rebate program. So we also created a company so that we can aggressively participate in a rebate program as well. That’s kind of a go-to-market strategy right now.

Kerim: How does the working with the utilities work? Like, as a homeowner, do I get marketing messages from the utility saying, “hey put a battery, get this rebate? Here’s an LG battery and then here’s a suggested installer who can put that in” kind of communication? 

Chris: Yeah, when the utility announces the rebate program, then the homeowner will kind of try to register for that program. Because the program is too attractive. So everybody rushes to register to that the program and installers try to promote such a battery to the homeowners, which is in the eligible product list. So we need to work with the utility as well as installers to select the battery.

Kerim: Yeah, got it.

Near-term product roadmap of LG Eelctronics home electrification solutions

One other thing I wanted to talk a little bit about is what is in the near- to mid-term product roadmap of home electrification in the context of storage and batteries? What else do you expect to see?

Chris: Yeah, in the case of home electrification as a package, we keep trying to develop the application to manage each device and technology with our ESS, making the optimum, energy efficient. So this is kind of, one thing. 

Another thing is our current product is AC comfort. So we are planning to develop DC-coupled as well. 

Kerim: Actually, interesting. 

Chris: Yeah, so this is kind of our long-term plan, but I don’t know how long it’s going to be, but this is another product, and the roadmap we are working on it.

Kerim: Are you guys thinking of any like a bidirectional connection to EV charger type solutions in the context of connecting the home to the car in exchanging energy?

Chris: Yeah, since we have EV charger business within LG Electronics, definitely, we will look into that capability. That’s a good point.

Kerim: Yeah. Great. Well, Chris, thank you for all this wealth of information and a look into the world of LG. And we will do future sessions with your colleagues to dive deeper into your division’s great offerings. Thank you. Thank you very much.

Chris: Thank you. Thank you. Thank you for giving me a chance to, talk about my experience and our product. And I hope it’ll help to promote our company and our ESS, which is Home 8 product.

Kerim: Thank you, Chris. Talk to you soon. 

Chris: Thank you.