LG Energy Solution posts W7.56tr in Q2 sales, targets AI power market in H2

LG Energy Solution's factory in Holland, Michigan [LG Energy Solution]

LG Energy Solution said it posted sales of 7.56 trillion won ($5.21 billion) and operating profit of 113.3 billion won in the second quarter. Sales rose 24.8 percent from a year earlier and 15.3 percent quarter-on-quarter, though operating profit fell 77 percent year-on-year. The company returned to the black for the first time in two quarters, reversing a 207.8 billion won operating loss in the previous quarter.

First-half sales reached 14.12 trillion won, up 10.5 percent from the same period last year, the company disclosed Thursday. The company swung to an operating loss of 94.5 billion won for the first half.

LG Energy Solution plans to accelerate the expansion of North American production capacity and secure new orders in the second half.

An employee inspects a battery production line at LG Energy Solution's factory in Holland, Michigan. [LG Energy Solution]

The energy storage system (ESS) segment posted sharp growth. LG Energy Solution's first-half ESS sales surged 4.6-fold from a year earlier, with ESS expanding to account for nearly 30 percent of total sales. The company redirected some electric vehicle production capacity toward ESS to meet shifting demand.

New orders also climbed in the first half. LG Energy Solution secured more than 3 trillion won in new ESS contracts, including projects for AI data centers whose end customers are hyperscalers. AI data centers require a stable supply of large-scale power, driving growing demand for battery-based power storage and backup systems.

The company is also broadening its North American production base. LG Energy Solution began operating ESS production lines at its second GM joint venture and its Honda joint venture in May and June, respectively. It aims to secure more than 50GWh of ESS production capacity in North America by year-end.

Lee Chang-sil, executive vice president and CFO of LG Energy Solution, said sales rose 15 percent quarter-on-quarter, driven by increased shipments of mid- to low-end EV products and cylindrical batteries, as well as expanded North American ESS production capacity. "ESS in particular grew more than 30 percent quarter-on-quarter, led by shipments in North America and Europe, continuing its strong growth momentum," he said.

LG Energy Solution's grid-scale ESS product [LG Energy Solution]

Profitability also improved somewhat. The company attributed the gains to higher utilization rates at its European factories, a greater share of sales from higher-margin cylindrical batteries, and reduced fixed-cost burdens as North American ESS production increased.

"Second-quarter earnings returned to the black for the first time in two quarters, supported by improved utilization in Europe, a higher share of cylindrical battery sales — our most profitable product — and a gradual reduction in fixed-cost burdens through increased North American ESS production," Lee said.

The company also struck an optimistic tone on the ESS market outlook. While grid-scale ESS tied to renewable energy generation has traditionally been the core segment, demand is now expanding into standalone ESS and long-duration energy storage. ESS is increasingly being deployed as a power-stabilization solution in areas where grid connections are delayed or power loads are unstable.

AI data centers are emerging as a key driver of ESS demand growth. As more operators seek to build their own power infrastructure rather than rely solely on large-scale grids, battery applications are broadening to include battery energy storage systems (BESS), uninterruptible power supplies (UPS) and battery backup units (BBU). Batteries are moving well beyond simple storage devices to become essential components of data center power infrastructure.

LG Energy Solution plans to expand ESS production capacity this year with a focus on pouch-type LFP cells, and aims to add prismatic lines next year. The company is also concentrating on building up its North American supply capabilities so customers can qualify for the US investment tax credit (ITC).

The company is also strengthening its system integration capabilities, aiming to enhance ESS competitiveness through an end-to-end approach that bundles software and operational solutions alongside battery cell supply.

In the EV battery business, the company is targeting a second-half recovery centered on its 46-series lineup. Thermal safety regulations for electric vehicles are tightening — particularly in Europe — and automakers are expanding development of next-generation vehicles using cell-to-chassis (CTx) integration, which embeds cells directly into the vehicle structure, driving demand for high-energy-density, high-safety batteries.

Kim Dong-myung, president of LG Energy Solution [LG Energy Solution]

LG Energy Solution offers a broad 46-series lineup ranging from the 4680 to the 46120. The series features a robust can material and a tabless design that reduces internal resistance, making it well-suited to achieving higher energy density and fast-charging performance while maintaining structural stability and thermal safety.

A key second-half task is preparing the cylindrical production line in Arizona. The line targets a fourth-quarter launch this year, features a 50 percent improvement in equipment efficiency over existing lines, and is dedicated to 46-series production. The company also plans to gradually raise utilization rates at its North American joint venture plants and expand shipments of mid- to low-end products from its Polish factory.

Next-generation battery development is proceeding in parallel. A new high-output tabless 2170 cell will target the BBU and robotics markets, while sodium-ion batteries are under development with a goal of sample shipments to ESS and automotive customers next year. The company also plans to prepare a pilot line using a dry-electrode process within the year, advancing its solid-state battery trial production program.

kwater@heraldcorp.com