South Korea’s LG Electronics (066570.KS) is accelerating its push into the next-generation AI automotive market by formalizing its automotive electronics partnership with Nvidia. The strategy is to expand beyond its traditional focus on in-vehicle infotainment into autonomous driving and AI services, positioning the auto electronics business as a new growth pillar.
According to LG Electronics’ semi-annual report released on the 21st, the Vehicle Solution (VS) Business Division, which oversees the auto electronics business, stated: “We are collaborating with Nvidia on technology review and development environment setup for next-generation high-performance computing platforms to develop an AIDV (AI-defined vehicle) platform.”
This marks the first time LG Electronics has directly referenced its auto electronics collaboration with Nvidia in a regulatory filing. While the company has previously worked with Nvidia on individual business segments including robotics, AI data center cooling systems, and automotive software, the partnership scope has now been broadened with the auto electronics collaboration explicitly stated in an official document.
Top executives from both companies are also reinforcing the partnership. Koo Kwang-mo, chairman of LG Group, recently met with Nvidia CEO Jensen Huang at Nvidia’s headquarters in Santa Clara, California. Eun Seok-hyun, president of LG Electronics’ VS Business Division, and Lee Jae-sung, president of the ES Business Division overseeing HVAC operations, accompanied the chairman, underscoring the broad-based collaboration between the two companies.
Expanding from Infotainment to Autonomous Driving
LG Electronics’ auto electronics business has grown primarily around in-vehicle infotainment products such as telematics, display audio, and navigation systems. In the first and second quarters of this year, quarterly revenue exceeded 3 trillion won (approximately $2.2 billion) each, maintaining a stable growth trajectory. With increased supply volumes to global automakers, the average utilization rate reached 97.9% in the first half of this year, effectively maintaining full-capacity operations.
LG Electronics now plans to leverage its Nvidia partnership to expand into the autonomous driving space. The core objective is to address AIDV, which has emerged as the new paradigm in the automotive market. AIDV refers to next-generation intelligent vehicles where AI autonomously determines and optimizes overall vehicle operations, including functions, performance, and user experience. It is regarded as an evolution beyond the existing SDV (software-defined vehicle) concept.
Specifically, LG Electronics plans to combine its in-vehicle infotainment products and automotive software capabilities with Nvidia’s Drive Hyperion automotive computing platform to develop a high-performance computing (HPC) platform targeting next-generation AIDVs.
Drive Hyperion is a platform designed to enable Level 4 autonomous driving, where vehicles operate without driver intervention. It features two “Drive AGX Thor” system-on-chips (SoCs) based on Nvidia’s latest Blackwell AI chip architecture.
LG Electronics has long defined vehicles as “living spaces on wheels” and has provided various in-car services. Through the Nvidia collaboration, the company aims to develop next-generation vehicle solutions encompassing autonomous driving functions and AI services, and supply them to global original equipment manufacturers (OEMs) to secure new growth opportunities.
EV Powertrain Components and Lighting Businesses Also Strong
The EV powertrain components business, another pillar of the auto electronics segment, is also showing steep growth. LG Magna e-Powertrain, a joint venture established in 2021, posted first-half revenue of 379.2 billion won (approximately $274.6 million), up 112% from 178.5 billion won in the same period last year. Net income also swung to a profit of 16.2 billion won (approximately $11.7 million) from a loss of 10.9 billion won (approximately $7.9 million) a year earlier.
Growth is being driven particularly by expanding order intake in European and Asian markets. In its second-quarter conference call, LG Electronics stated: “In the first half of this year, we secured multiple EV powertrain projects from major automakers in Europe and Asia. We plan to utilize our Hungary plant, targeting mass production in January next year, as an Eastern European production base while pursuing new orders to secure high utilization rates from the outset.”
The performance improvement of ZKW, the Austrian automotive lighting company acquired in 2018, is also contributing to the auto electronics business’s profitability.
Auto Electronics Business Establishes Itself as a Cash Cow
Launched in 2013, LG Electronics’ VS Business Division posted losses for an extended period before achieving its first annual profit in 2022, marking a turning point. In 2023, a decade after its inception, annual revenue surpassed 10 trillion won (approximately $7.2 billion), establishing the division as a core business alongside home appliances.
Profitability is also showing clear improvement. The VS Business Division’s operating margin remained in the 1-2% range from 2022 to 2024 but rose to 5% in 2025. iM Securities projects the operating margin will exceed 7% for the first time this year and enter the 8% range next year.
Ko Eui-young, an analyst at iM Securities, noted: “In-vehicle infotainment is demonstrating high profitability, with improvements from EV powertrain and ZKW layered on top.”
LG Electronics’ auto electronics business has now positioned itself as a core cash generator that rivals home appliances not only in revenue growth but also in profitability. If the AI vehicle collaboration with Nvidia gains full momentum, the company is expected to secure additional growth engines in the new domains of autonomous driving and AI services.