- LG Energy Solution posts KRW 5.6 trillion in consolidated revenue and KRW 492.2 billion in operating profit in Q2 2025
- The company records quarterly operating profit even without North American production incentive, thanks to product mix improvements and enhanced cost efficiency
- In response to recent policy changes and market demands, the company to focus on ESS business in North America and optimizing its product, technology portfolios
Even without a North American production incentive, LG Energy Solution reported a quarterly operating profit in its second quarter of 2025, primarily due to improvements in the product mix and ongoing efforts to increase cost effectiveness.
Consolidated sales for the corporation was KRW 5.6 trillion, down 11.2 percent from the previous quarter. With an operating profit margin of 8.8%, the operating profit was KRW 492.2 billion, up 31.4 percent over the previous quarter. The expected KRW 490.8 billion North American production incentive is included in the operational profit.
“In the second quarter, we secured stable EV battery sales and also started production at our new ESS battery facility in North America,” stated Chang Sil Lee, CFO of LG Energy Solution. “However, constrained customer purchase sentiment, coupled with the reflection of metal price decline to our average selling price (ASP) affected our quarterly revenue.”
Lee attached, “At the same time, we saw improvements in our product mix thanks to increased production in North America, along with enhanced cost efficiency and favorable material cost ratio, all of which contributed to the quarterly operating profit even when excluding North American production incentive.”
LG Energy Solution presented its strategic action plans and market projections for the second half of the year during the results conference. The business expects a short-term slowdown in EV demand in response to changes in U.S., European, and U.K. tariffs and policies, as well as the resulting cost pressure on major automakers. It also anticipates that developments in autonomous driving technologies will fuel growth momentum in the medium to long run.
By leveraging new business prospects from both new and current renewable energy plants and AI data centers, the firm anticipates a rise in demand in the energy storage system (ESS) industry. Additionally, by encouraging a change in the supply chain toward non-Chinese battery providers, the IRA Investment Tax Credit (ITC) is expected to create new possibilities.
During the results conference, LG Energy Solution provided its market forecasts and strategic action plans for the second half of the year. Due to changes in U.S., European, and U.K. tariffs and policy, as well as the ensuing cost pressure on major manufacturers, the company anticipates a short-term slowdown in EV demand. In the medium to long term, it also expects advancements in autonomous driving technology to drive growth momentum.
LG Energy Solution currently seeks to expand on its second-quarter achievements and sustain its growth momentum in light of these transformations. The company’s second-quarter effort on localizing ESS battery production has paid off, as production has begun at its first North American ESS battery manufacturing center in Michigan. By the end of this year, the business hopes to increase its yearly manufacturing capacity for ESS batteries to 17GWh after proactively modifying its plans for capacity development.
In terms of operation, LG Energy Solution will first maximize the utilization of its existing production capacity by focusing on ESS batteries and new form factors and chemistries. Also, it will reduce fixed costs by adjusting and scaling down investment plans while securing competitiveness in the supply chain and sourcing.
In terms of its business portfolio, the company will continue to expand its ESS business in North America and secure over 30GWh of annual production capacity in the region by the end of 2026. In Europe, it will start mass producing mid- to low-end batteries such as high-voltage mid-nickel and LFP batteries at its Poland facility in the second-half of the year.
In terms of technological advancement, LG Energy Solution plans to enhance its mid- to low-end product portfolio with EV/ESS LFP batteries and EV LMR (lithium manganese-rich) batteries, while also advancing product competitiveness—including energy density—through innovative technologies. The company will also launch EV batteries with the charging speed of less than 10 minutes by 2028. For dry electrodes, a key driver for cost innovation, the company will evaluate the production feasibility within this year and establish sample production system at its facility in Ochang, Korea.
