LG Energy Solution announced its full-year and fourth-quarter financial results for 2025, reporting KRW 23.7 trillion in consolidated revenue and KRW 1.3 trillion in operating profit, as the company sharpened its strategic focus on energy storage systems (ESS) and diversified battery applications.
While annual revenue declined 7.6 percent year-on-year, the company’s operating profit more than doubled, rising 133.9 percent compared with the previous year. The operating profit margin reached 5.7 percent, including benefits from North American production incentives.
ESS growth offsets EV market slowdown
LG Energy Solution attributed the revenue decline primarily to slower electric vehicle (EV) sales among major customers. However, profitability improved due to a stronger product mix, lower material costs, and stable sales performance in North America.
“ESS sales grew solidly last year as we proactively expanded LFP production capacity in North America,” said Chang Sil Lee, Chief Financial Officer of LG Energy Solution. “At the same time, we strengthened profitability through operational efficiency and disciplined cost management.”
The company also improved working capital efficiency by reducing inventory levels and optimizing supply chain operations.
Asset optimization and production diversification
In 2025, LG Energy Solution reallocated production capacity between EV and ESS batteries to improve utilization and limit new capital expenditure. It also established production bases in Europe for mid-to-low-end battery solutions such as LFP and high-voltage mid-nickel batteries, while enhancing capital efficiency through the sale of non-core assets.
Production diversification remained a key focus. The company began manufacturing 46-Series cylindrical batteries at its Ochang plant in South Korea and secured an order backlog exceeding 300 GWh for the product by year-end. In the ESS segment, LG Energy Solution started local LFP battery production in North America and built an ESS order backlog of 140 GWh, supported by expanded system integration capabilities.
Fourth-quarter performance
In the fourth quarter of 2025, LG Energy Solution recorded KRW 6.1 trillion in revenue, up 7.7 percent quarter-on-quarter. The company posted an operating loss of KRW 122 billion for the quarter, which included KRW 332.8 billion in North American production incentives.
2026 outlook: ESS expansion and new applications
Looking ahead, LG Energy Solution forecasts over 40 percent growth in global ESS installations in 2026, driven largely by demand in North America for grid-scale storage to support data centers and renewable energy projects. ESS is expected to account for around half of total battery demand in the region.
To capitalize on this growth, the company aims to secure more than 90 GWh in new ESS orders in 2026 and expand global ESS production capacity to over 60 GWh, with more than 80 percent located in North America. Capacity expansions will focus on facilities in Michigan, while 일부 joint-venture production lines will be temporarily repurposed for ESS output.
Expanded EV battery portfolio and emerging markets
In the EV segment, LG Energy Solution plans to broaden its battery portfolio across price tiers. Mass production of LFP and high-voltage mid-nickel batteries for mid-to-low-end markets is scheduled to begin in the first quarter of 2026. The company will also convert selected lines to LMR prismatic cells and launch production of 46-Series cylindrical batteries at its new Arizona facility by late 2026.
Beyond automotive applications, LG Energy Solution is expanding into robotics, maritime, and urban air mobility (UAM) markets. The company is already supplying cylindrical batteries to six global robotics manufacturers and is engaged in discussions for next-generation models.
Financial targets and capital discipline
For 2026, LG Energy Solution targets a mid-teen to 20 percent year-on-year increase in revenue and a mid-single-digit operating profit margin, supported by ESS growth, cost competitiveness, and operational efficiency.
The company also plans to cut capital expenditures by more than 40 percent compared with last year, prioritizing cash flow management, utilization of existing production lines, and investments directly linked to revenue growth.
