LG Energy Solution, South Korea's largest battery maker, reported preliminary second-quarter earnings that came in below analyst expectations, as weaker electric vehicle momentum in key markets such as the US continued to weigh on profitability. The company posted operating profit of 113.3 billion won, or $74 million, for the three months ended June 30, falling short of analyst estimates of 210.7 billion won. Revenue increased almost 25% to 7.6 trillion won, while LG Energy said it would have recorded a 127.7 billion won loss without US advanced manufacturing tax credits.
Investors reacted cautiously to the update, with LG Energy shares falling as much as 8.2% in early Seoul trading before trimming losses to around 4%. The earnings miss came even as EV shipments to Europe and Asia improved, supported by the Middle East energy crisis, US tariff refunds, and a weaker Korean won. The broader concern is that the slower US EV transition, alongside US tariffs and intense Chinese competition, could keep pressuring South Korean battery makers.
General Motors NYSE:GM, a major US automaker, has warned of $6 billion in charges tied to EV production cuts, while Ford Motor NYSE:F, another major US automaker, announced $19.5 billion in EV overhaul costs and ended a 9.6 trillion won battery deal with LG Energy and another venture with SK Innovation's battery unit. To offset that pressure, LG Energy is moving faster into energy storage systems for AI-driven data centers, shifting several EV production lines to raise ESS cell output to at least 60 GWh from 36 GWh and targeting at least 90 GWh in new orders this year. The company has also signed energy storage deals with DTE Energy, a US utility, and Tesla, an electric vehicle and energy storage company, while its joint venture with Honda Motor, a Japanese automaker, has begun mass production of ESS cells at an Ohio plant originally built for EV batteries.