Focusing on Energy Storage and Advancing Localized Supply Chains in North America: LG Energy Solutions Turns Profit in Q1 2025

On April 30, LG Energy Solutions released its performance report for the first quarter of 2025, revealing that the company achieved total revenue of 6.3 trillion Korean won, which represents a decrease of 2.9% quarter-over-quarter, but an increase of 2.2% year-over-year. The operating profit stood at 375 billion Korean won, with an EBITDA margin of 20%, marking a return to profitability. This quarter’s operating profit included 458 billion Korean won from tax credits under the Inflation Reduction Act (IRA). Based on the exchange rate on May 8, LG Energy’s revenue is approximately 32.76 billion RMB, with an operating profit of 1.95 billion RMB.

Other leading companies, such as CATL, BYD, Sungrow Power, and Tesla, also announced their Q1 performance, with all but Tesla reporting an increase in net profits compared to the same period last year.

LG Energy’s Chief Financial Officer, Li Changshi, stated: “In the first quarter, we performed strongly in the North American market, achieving steady shipments for our newly launched electric vehicle models. However, our revenue declined from the previous quarter due to automakers continuing their conservative inventory management strategies. Fortunately, the elimination of one-time factors that previously impacted profits, coupled with efficient efforts in controlling raw material costs and enhancing overall cost efficiency, led to our successful return to profitability this quarter.”

Regarding energy storage, LG Energy has readjusted its production capacity in North America to better meet market demand and mitigate ongoing impacts from market changes. The company has paused construction of its energy storage system (ESS) battery plant in Arizona, prioritizing existing capacity in Michigan instead, and has accelerated the launch of lithium iron phosphate (LFP) battery production for ESS by a year. Additionally, LG Energy is advancing the acquisition of the GM joint venture Phase 3 project in Michigan, which will further expand its market presence in North America while maximizing the utilization of existing investments and reducing equipment idle time.

Alongside strategic adjustments, LG Energy has expanded its 46-series cylindrical batteries to traditional automotive manufacturers, securing new orders totaling 10 GWh annually. The company has also received an order for ESS batteries from the Polish National Energy Group (PGE) and a 4 GWh order for residential ESS batteries from Delta Electronics in the United States. Progress is being made in new application markets, with the company accelerating its presence in solar electric vehicles and offshore wind projects, and establishing its first battery recycling plant in Europe through a joint venture with Derichebourg in France. This plant is set to have an annual pretreatment capacity of 20,000 tons to ensure compliance with EU battery recycling regulations and to stabilize the metal supply chain.

Changes in U.S. tariff policies and the EU’s industrial action plan for the automotive sector are expected to have a wide-ranging impact on the battery industry. LG Energy plans to focus this year on optimizing operations, reducing costs, and actively exploring strategic business opportunities. The company will adopt a cautious approach to inventory management in its power battery segment while concentrating on the more promising energy storage system sector to further expand revenue. Additionally, LG Energy plans to launch new products, such as the 46-series cylindrical batteries, and explore emerging applications in humanoid robots and drones to broaden the use of cylindrical batteries.

To address the pressures from tariff policies, the company will accelerate its strategy for localizing supply chains in North America, collaborating closely with material companies in the region to jointly navigate challenges. Furthermore, LG Energy will expedite the development and application of new technologies, such as dry electrodes, to enhance its cost competitiveness.