LG Energy Solution achieves "performance defense" with ESS... performs excellently amid slowdown in the electric vehicle market.

Although the growth momentum of the electric vehicle market has slowed, LG Energy Solution has achieved continuous performance improvement through the growth of its energy storage system (ESS) business and internal efficiency optimization strategy. Despite the reduction in production subsidies in the United States, it has maintained operating profit solely from its main business, which is gaining market attention.

LG Energy Solution announced on October 30 that the preliminary operating profit for the consolidated financial statements for the third quarter of 2025 was 601.3 billion won. This is an increase of 34.1% compared to the same period last year and is 16% higher than the market expectation value of 518.3 billion won calculated by financial information company Infomax. However, this includes a tax credit from the U.S. Advanced Manufacturing Production Tax Credit (AMPC) amounting to 365.5 billion won; excluding this, the operating profit scale would be 235.8 billion won. Nevertheless, following the second quarter, this quarter still maintained profitability under the AMPC benchmark, demonstrating the effectiveness of the improvement in its financial health.

The sales volume was 5.6999 trillion KRW, a decrease of 17.1% compared to the same period last year, but a rise of 2.4% quarter-on-quarter. The net profit was 536.1 billion KRW, a decrease of 4.5% from last year, but still maintains a profitable trend. Sales of soft-pack batteries for electric vehicles decreased, while the ESS department saw a significant rise in sales due to increased shipments, and the small battery department also maintained stable performance.

The company expects that the rise of the ESS business will not be a short-term phenomenon. With major US IT companies expanding their investments in grid ESS and the continued tax credit policy for clean energy investments, it is anticipated that the market will have an average annual growth rate exceeding 20% from 2024 to 2028. In light of this, LG Energy is committed to developing new products that are highly efficient and cost-competitive, while also preparing to launch square LFP( lithium iron phosphate) based ESS products before 2027 to strengthen its product portfolio.

In addition, the company plans to combine the system integration capabilities of its subsidiary Vertech with operational management technology to provide solutions that integrate power forecasting and power trading functions. Through this strategy, the company aims to go beyond simply supplying ESS and become a competitive enterprise that offers “overall solutions.” In the electric vehicle sector, the company is also achieving differentiation by supplying customized batteries that are compatible with various vehicle models, and is building an architecture that includes multiple forms of batteries, from pouch type and cylindrical to square, capable of accommodating all vehicle models.

The significance of this strategy lies in its foundation for flexibly responding to market changes amid global economic uncertainty. If the ESS market expands at an unexpectedly rapid pace in the future and the demand for efficient batteries rises, LG Energy Solution's sales structure is also likely to gradually stabilize. Businesses such as ESS, which are based on fixed income, will compensate for the profit model centered around electric vehicles, and in the medium to long term, it is expected to help reduce performance volatility.