South Korea's three leading battery firms—LG Energy Solution, Samsung SDI, and SK On—have all emerged from a prolonged period of losses. Amid a continuing electric vehicle (EV) demand slump, the companies secured early-mover advantages in energy storage system (ESS) demand centered on the U.S. and implemented cost-cutting measures, leading to simultaneous profitability.
According to the battery industry on the 30th, all three domestic battery makers recorded operating profit profits in the second quarter of this year. This marks the first time since the third quarter of 2024 that all three companies posted profits simultaneously. Profitability improved due to expanded ESS orders, improved utilization rates, cost reductions, and factors such as U.S. production tax credits and one-time items.
LG Energy Solution reported an operating profit of 113.3 billion won on a consolidated basis for the second quarter of this year. Although this represents a 77% decline compared to the same period last year, the company turned from an operating loss of 27.8 billion won in the first quarter back into profitability within one quarter. It also escaped two consecutive quarters of losses that began in the fourth quarter of last year. This was driven by a 4.6-fold increase in second-quarter ESS sales compared to the same period last year, as the company absorbed local demand based on five ESS production bases in North America. In the first half of the year, it also secured new orders exceeding 3 trillion won for artificial intelligence data centers (AIDC).
Samsung SDI also achieved an operating profit of 203.8 billion won in the second quarter, turning from an operating loss of 397.8 billion won in the same period last year into profitability. Even excluding the $107.7 billion Advanced Manufacturing Production Tax Credit (AMPC) benefit from the U.S., it recorded an operating profit of 96.1 billion won, confirming its own recovery in profitability. As a result, it achieved its "performance turnaround" commitment early by recording cumulative operating profits of 48.2 billion won in the first half of this year. The improvement was bolstered by long-term supply contracts with U.S. ESS customers based on the competitiveness of prismatic batteries and local production capabilities. According to the company, the secured order volume is sufficient to cover a significant portion of its 2029 production capacity.
SK On recorded an operating profit of 821.8 billion won, representing an 888.2% improvement compared to the same period last year (an operating loss of 66.5 billion won), successfully turning into profitability. This is the highest operating profit in 19 quarters since its spin-off in 2021. The result was supported by expanded sales in the Asian region, receipt of compensation following the termination of its joint venture with Ford, and an increase in tax credit amounts under the U.S. Inflation Reduction Act (IRA).
All three battery makers are expected to focus on building local supply chains in the second half of the year. Lee Chang-sil, CFO of LG Energy Solution, stated, "We will expand our existing pouch-type LFP ESS production capacity and prepare for prismatic LFP (lithium iron phosphate) batteries at Yangsan next year without any delays, maximizing benefits from customer investment tax credits (ITC), thereby strengthening our position as the largest ESS supplier." He added, "We also plan to secure sodium battery technology suitable for long-duration ESS markets."
Samsung SDI plans to expand local production capacity by approximately 30 GWh (gigawatt-hours) annually at its joint venture Starplus Energy plant in Indiana, U.S., this year, including LFP batteries for ESS. Jo Young-hee, head of Samsung SDI's ESS business team, emphasized, "The prismatic LFP line for ESS in the U.S. is currently undergoing quality verification at Yangsan. As originally planned, we will begin cell production at Yangsan in October and start supplying customers with our Samsung Battery Box (SBB) 2.0 solution by year-end."
SK On has also established a total production capacity of over 100 GWh through four plants in the U.S.: its existing standalone Georgia plant, SK Battery America Plants 1 & 2 (57 GWh); a standalone Tennessee plant (45 GWh); and the HSBMA plant scheduled to begin operations this year (35 GWh). An Geon, SK On Gi Hoek-jo-jeong (Head), added, "We are preparing to effectively enter the ESS business," and noted, "We will decide on further ESS transitions in the future based on the scale of incoming orders."
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