LG Energy Solution posted a 138% year-on-year surge in first-quarter operating profit, boosted entirely by U.S. tax credits that masked underlying operational challenges.
The South Korean battery maker reported operating profit of 374.7 billion won ($281.7 million) for the January-March period, according to preliminary results released Sunday. The company’s Advanced Manufacturing Production Credit (AMPC) under the U.S. Inflation Reduction Act reached 457.7 billion won ($344.1 million), up 21% from the previous quarter.
Strip away those subsidies, and LG Energy Solution’s actual operations recorded an 83 billion won ($62.4 million) loss. This marks an improvement from the 602.8 billion won operational deficit in the fourth quarter but highlights the company’s continued dependence on American tax benefits.
Revenue rose 2.2% from a year earlier to 6.27 trillion won ($4.7 billion), though it fell 2.9% from the previous quarter as some automakers continued year-end inventory adjustments and seasonal weakness affected the energy storage business.
The battery maker faces uncertainty as the newly elected Trump administration may scale back or eliminate IRA incentives. In response, LG Energy Solution is focusing on strengthening product quality, cutting costs, and investing in future technologies. The company recently formalized the acquisition of its third joint venture with General Motors in Michigan and announced expanded energy storage production at facilities in Michigan and Poland.
