LG Energy Solution sees sales grow by 73 percent in Q2

LG Energy Solution Ltd.’s Ochang Energy Plant in Cheongju, North Chungcheong Province [Courtesy of LGES]

South Korea’s LG Energy Solution Ltd., the world’s second-biggest electric battery maker, continued its solid growth trajectory and achieved its highest quarterly revenue.

On Friday, LG Energy Solution announced preliminary sales of 8.77 trillion won ($6.75 billion) and operating profit of 611.6 billion for the second quarter. Sales grew by 73 percent from 5.71 trillion won from last year, surpassing the previous highest quarterly revenue of 8.75 trillion won during the first quarter of this year. Compared with the first quarter, sales increased by 0.3 percent, while operating profit declined by 3.4 percent.

Although the second-quarter operating profit decreased compared with the first quarter’s 633.2 billion won, it increased by more than three times compared with the second quarter of last year’s 195.6 billion won.

“The second-quarter operating profit includes an estimated tax credit of 110.9 billion won under the U.S. Inflation Reduction Act (IRA),” said an official from the company. “Excluding this, the operating profit for the second quarter was 500.7 billion won, with an operating margin of 5.7 percent.”

Considering that LG Energy Solution achieved an operating profit of 1.21 trillion over the past year, it has already recorded an operating profit of 1. 24 billion won that exceeds last year‘s level in the first half of this year. This year, the company is on track to exceed 2 trillion won in operating profit for the first time, and could even reach 3 trillion won.

In the previous first quarter, LG Energy Solution received a tax credit of 100.3 billion won under the IRA. “LG Energy Solution, which operates and manages a total of eight production plants in North America, is pursuing stable growth rather than rapid expansion,” an industry insider said. “As the North American factories start to build up production and quality capabilities, the scale of the tax credit is expected to increase.”

However, the insider added, there was a slight slowdown in the second-quarter operating profit due to the increase in battery manufacturing costs, but since the company has contracts with finished vehicle manufacturers that are linked to market prices, the impact of this factor on the overall annual performance is expected to be limited.

LG Energy Solution was also active in investment in the second quarter of this year.

In April, the company invested 600 billion won in the Ochang Energy Plant in Cheongju, North Chungcheong Province to build a new battery test production and mass production test facility. It will pour a total of 4 trillion won by 2026 as a strategic investment to prepare for the production of next-generation pouch-type batteries, which will last longer than existing batteries.

In May, LG Energy Solution signed a contract with Hyundai Motor Group to build a joint venture plant for electric vehicle batteries in the U.S., with an investment of 5.7 trillion won. Based on the plant to be built in Savannah, Georgia, with the aim of operating at the end of 2025, LG Energy Solution is aiming to become the No. 1 player in the U.S. market as well.