A view of LG Energy Solution’s plant in Holland, Michigan, U.S. Photo courtesy of LG Energy Solution
LG Energy Solution returned to profit in the second quarter, driven by expanded North American energy storage system (ESS) battery production capacity and a rebound in electric vehicle demand. The company expressed confidence that it could more than double its ESS shipments in the second half, when its ESS production sites move into full operation, compared with the first half, boosting annual company-wide revenue by more than 20%.
LG Energy Solution (373220.KS) reported second-quarter revenue of 7.5602 trillion won and operating profit of 113.3 billion won on a consolidated basis, the company said on the 30th. Revenue rose 24.8% from a year earlier, while operating profit fell 77.0%. Still, operating profit returned to the black for the first time in six months since the fourth quarter of last year.
Growth in the ESS business was notable. LG Energy Solution had preemptively converted its EV production capacity in North America, where electric vehicle demand had stalled, to ESS. As a result, second-quarter ESS revenue rose 4.6-fold from a year earlier, and its share of total company revenue expanded to the high 20% range. In the first half, the company also secured more than 3 trillion won in new orders, including a hyperscaler AI data center project for an end customer.
LG Energy Solution forecast that its ESS business would continue to grow in the second half. “In the third quarter, ESS shipments are expected to increase 50% as new North American production sites expand operations,” said Lee Chang-sil, Chief Financial Officer (CFO) and Vice President of LG Energy Solution. “Initial operating costs and other factors will affect profitability for a certain period, but we will improve through cost reductions from prompt production stabilization and operational efficiency efforts.”
LG Energy Solution is continuing order discussions for large volumes with major clients currently supplied with ESS. It is also in talks with several large clients preparing AI data center projects in the United States, targeting orders within the year.
LG Energy Solution plans to respond with mid- to low-priced lineups such as mid-nickel in Europe and Asia, where electric vehicle demand is expanding. At the earnings briefing that day, the company said, “In the second half, we will run the Nanjing plant in China at full capacity, and steadily proceed with mass production preparations for the 46-series being produced in Ochang, as well as the U.S. Arizona plant that will begin operations within the year.”
Regarding next-generation products, the company will address the battery backup unit (BBU) and robot markets through its new high-output tabless 2170 product. For sodium-ion batteries, it is targeting sample shipments to ESS and battery clients next year. In addition, it plans to build a pilot line applying a dry electrode process within the year to pursue trial production of price-competitive solid-state batteries.