In brief
LG Energy Solution Ltd. swung to a net loss of 296.9 billion won in Q3, after a surge in operating profit and sales driven by energy‑storage shipments and European battery sales. The company still benefited from U.S. tax credits, but first‑quarter‑to‑quarter declines in the overall EV market pressured its bottom line, leading to a total‑year loss of 1.57 trillion won.
South Korea’s leading battery manufacturer, LG Energy Solution Ltd. (LGES), announced a third‑quarter net loss of 296.9 billion won (US$221 million) on a regulatory filing, a stark reversal from the 536.1 billion‑won profit posted in the same period last year. The swing reflects a prolonged slowdown in the electric‑vehicle (EV) market, which has put pressure on the company’s earnings despite a boost to operating profit and sales.
Operating profit, however, rose 25.7 percent from 601.3 billion won a year earlier to 756 billion won in the September quarter. Sales jumped 59 percent to 9.64 trillion won from 6.06 trillion won a year earlier, thanks largely to shipments of energy‑storage systems (ESS) to North America and sales of mid‑ and low‑priced pouch‑type batteries in Europe. “Increased energy‑storage system (ESS) shipments to North America and sales of mid‑ and low‑priced pouch‑type batteries in Europe helped support earnings despite a prolonged slowdown in the EV sector,” the company said in the filing.
LGES benefited from 416.9 billion won in tax credits under the Advanced Manufacturing Production Credit (AMPC) program of the U.S. Inflation Reduction Act, a policy designed to incentivize domestic production of green technology. Excluding those credits, operating profit for the September quarter remained healthy at 339.1 billion won.
For the full first nine months of the year, LGES reported a net loss of 1.57 trillion won versus a net profit of 853.3 billion won a year earlier. Operating profit fell 54.9 percent from 1.47 trillion won a year earlier to 661.6 billion won, while sales grew 26 percent to 23.75 trillion won from 18.84 trillion won.
Industry analysts note that the global EV slowdown is linked to higher battery costs, supply‑chain headwinds, and regional trade disputes. The dip in high‑margin premium battery demand has cut into the markup of SK Battery and Samsung SDI, while LGES is now seen exploiting the mid‑tier market and energy‑storage opportunities.
Environmental observers point to the mixed implications for sustainable transport. Although fewer new EVs on the road may reduce emissions in the short term, the pivot to ESS and lower‑priced batteries provides a critical bridge for renewable‑energy deployment. ESS units help balance wind and solar variability, keeping the grid cleaner and aiding the transition to a low‑carbon future.
LGES’s mid‑tier battery strategy also aligns with the European Union’s battery policy, which promotes the use of locally sourced components and improved recycling pathways. By expanding its European footprint, the company may shorten supply chains, reduce emissions from logistics, and create more localized jobs.
Looking ahead, LGES will likely continue to invest in ESS manufacturing, citing rising demand for grid‑storage solutions amid a wave of new solar and wind projects worldwide. The company has announced plans for a new battery‑assembly plant in Tennessee, a move that could leverage U.S. federal tax incentives and address the domestic demand for green infrastructure.
Despite the Q3 loss, LGES’s executives remain cautiously optimistic. The firm’s share price has already stabilized after a sharp dip earlier in the month, and analysts predict that the company’s diversified product mix will cushion the long‑term impact of the EV slump.
