LG Energy Solution Ltd., a leading global battery manufacturer, reported a significant decrease in its second-quarter profits due to sluggish global electric vehicle (EV) sales. The South Korean company’s preliminary operating profit fell to 195.3 billion won ($141 million), marking a 58% decline from the 460.6 billion won recorded in the same period last year. Consolidated sales also dropped by 30% to 6.16 trillion won.
Despite the downturn, the company remains optimistic about a potential earnings improvement in the fourth quarter. This outlook is supported by an anticipated upswing in EV sales and more stable battery raw material prices. The latest quarterly results included 447.8 billion won in tax benefits under the US Inflation Reduction Act (IRA), which prevented the company from posting a substantial operating loss.
LG Energy’s operating profit and sales showed a 24% and 0.5% increase from the previous quarter, respectively, although the operating profit fell short of the market consensus of 233.7 billion won. An official from LG Energy noted that falling lithium and metal prices, along with reduced battery demand from automakers, had negatively impacted the company’s performance.
Looking forward, LG Energy plans to release finalized second-quarter results, including net profit and divisional performance, later this month. The company is also pivoting some of its production to energy storage system (ESS) batteries and ramping up the manufacture of low-cost lithium iron phosphate (LFP) batteries to meet growing demand from automakers like Tesla and Renault.
This strategic shift includes a recent agreement to supply LFP batteries to Renault’s EV unit, Ampere, starting in late 2025, which underscores LG’s commitment to adapting to market changes and sustaining growth despite current challenges.
