LG Energy Solution reported Q1 2025 earnings, returning to profitability due to cost-reduction measures. The company generated KRW 6.3 trillion in revenue, a 2.9% drop from the previous quarter but a 2.2% increase year-on-year. Operating profit reached KRW 375 billion, with a 20% EBITDA margin, including a KRW 458 billion IRA tax credit.
LG Energy Solution’s CFO, Chang Sil Lee, stated that despite solid shipments to North America and new EV models, quarterly revenue declined due to automakers’ conservative inventory management. However, the company returned to profitability in Q1, driven by successful material cost reductions and improved cost efficiency, with previous one-off items no longer affecting the profit.
In Q1, LG Energy Solution adjusted its North American production by halting the Arizona ESS battery plant construction and focusing on utilizing its Michigan plant to produce LFP batteries for ESS a year ahead of schedule. The company is also acquiring the GM JV Phase 3 in Michigan, expanding its North American footprint and optimizing facility utilization.
LG Energy Solution made significant strides in Q1, expanding its EV and ESS businesses. The company secured a 10 GWh order for 46-Series cylindrical batteries in North America, contracts with PGE for grid-scale ESS in Europe, and a 4 GWh residential ESS order from Delta Electronics in the U.S. It also explored new applications like solar EVs and offshore wind farms and established a European battery recycling joint venture in France with Derichebourg, targeting 20,000 tons of annual preprocessing capacity.
As regulatory changes, like U.S. tariffs and the EU’s industrial action plan for the automotive sector, are expected to impact the battery industry, LG Energy Solution will focus on improving operational efficiency and reducing costs while pursuing key business opportunities this year.
The company will prioritize critical investments, adjust its capacity expansion plans in line with market trends, and adopt a cautious approach to managing EV battery inventory, while also driving revenue growth in its high-potential ESS business.
Additionally, LG Energy Solution will continue to secure future demand from major customers with new products such as 46-Series cylindrical batteries, while also exploring innovative applications for these batteries in fields like humanoid robots and drones.
To address the impact of tariffs, the company will encourage local raw material production by partnering with material suppliers in North America and speed up the development of cost-reducing technologies, such as dry electrodes.
