LG Energy Solution has announced its second-quarter earnings for 2025, posting a quarterly operating profit, mainly through product mix improvements and continued efforts to improve cost efficiency.
The company posted consolidated revenue of KRW 5.6 trillion, an 11.2 percent decrease quarter-on-quarter. The operating profit was KRW 492.2 billion, marking a 31.4 percent increase quarter-on-quarter, with operating profit margin of 8.8 percent. The operating profit includes North American production incentive, which is estimated at KRW 490.8 billion.
“In the second quarter, we secured stable EV battery sales and also started production at our new ESS battery facility in North America,” said 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 added, “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.”
At the earnings conference, LG Energy Solution outlined its market outlook and strategic action plans for the second-half of the year. Following tariff and policy changes in the U.S., Europe, the U.K. and the associated cost pressure on major automakers, the company anticipates a short-term slowdown in EV demand.
The company projects increased demand in the energy storage system (ESS) market, capitalizing on new business opportunities from both existing and new renewable energy plants and AI data centers. It also predicts that the IRA Investment Tax Credit (ITC) will present more opportunities by incentivizing a shift in the supply chain toward non-Chinese battery suppliers.
In terms of market competition, the company expects recent policy changes to strengthen barriers against Prohibited Foreign Entities (PFE) entering the U.S. battery market, thereby reinforcing the advantage for battery companies that have already secured local production capabilities and stable operational competencies.
Taking these transitions into account, LG Energy Solution now aims to build on its second-quarter accomplishments and maintain its growth momentum. In the second quarter, the company focused on establishing local ESS battery production, which recently came to fruition with the start of production at its first North American ESS battery manufacturing hub in Michigan. By proactively adjusting its capacity expansion plans, the company now aims to expand its annual production capacity for ESS batteries to 17GWh by the end of this year.
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 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.
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