LG Energy Solution said Tuesday that it achieved revenue of 9.6434 trillion won and an operating profit of 756 billion won in the third quarter of this year.
Revenue increased by 59.0% and operating profit rose by 25.7% compared to the same period last year. Compared to the previous quarter, they increased by 27.6% and 567.3%, respectively. This performance includes 416.9 billion won in North American production subsidies, such as the Advanced Manufacturing Production Tax Credit (AMPC) under the U.S. Inflation Reduction Act (IRA). Excluding these, operating profit was 339.1 billion won, with an operating margin of 3.7%. The company achieved a profit even after excluding North American production subsidies.
Lee Chang-sil, vice president at LG Energy Solution, said, "Company-wide revenue in the third quarter increased by 28% compared to the previous quarter, driven by a significant increase in ESS (Energy Storage System) shipments and volume-centric growth in both EV (Electric Vehicle) pouch and cylindrical products."
He added, "Regarding profitability, improvements in utilization rates at the Poland plant, continued supply volumes of cylindrical products, and productivity improvements at new ESS mass production sites were reflected, resulting in an operating profit of 756 billion won."
In the third quarter of this year, LG Energy Solution signed its first direct supply contract for BESS (Battery Energy Storage Systems) with a Big Tech company and was selected as NVIDIA's 'DSX Ready BESS Partner,' becoming the only domestic battery company to receive such a designation. This strengthened its position in the AI (Artificial Intelligence) data center market. As it is negotiating new project supplies with multiple customers, additional order momentum is expected to continue into the fourth quarter.
In the EV business, the company announced that it secured a stable revenue base in the European EV market by newly signing contracts to expand supply volumes of next-generation high-voltage mid-nickel products.
Production capabilities were also strengthened. In the North American ESS business, the company added operation of new Link LINEs, which are container-type system assembly processes for cell production lines, enhancing local production stability and supply responsiveness. Driven by robust customer demand for EV cylindrical batteries and the resumption of operations at its joint venture (JV) with U.S.-based General Motors (GM), the company improved overall utilization rates.
Regarding the supply chain, the company strengthened long-term partnerships with existing LFP (Lithium Iron Phosphate) cathode material partners and signed purchase contracts with new partners to enhance its ability to respond to Non-PFE (Prohibited Foreign Entity) regulations. Additionally, it secured a stable raw material procurement base by signing long-term local lithium supply contracts with key material companies in Canada and the United States.
To actively respond to ESS demand in North America that meets local production and Non-PFE requirements, LG Energy Solution plans to secure an ESS production capacity of over 70GWh by the end of next year by adding new prismatic LINEs to its planned production capacity of over 50GWh by the end of this year. The company also stated it will proceed with final preparations for its Arizona plant, its first North American cylindrical battery production hub, without issue by year-end.
In Europe, the company will reinforce its production portfolio in line with policies for localizing battery manufacturing and supply chains, as well as trends toward diversifying electric vehicle models. The Poland plant, which has converted some of its EV production lines to ESS since last year, is scheduled to secure 46-series production capabilities starting in 2029. Through this, it aims to respond to the diverse needs of automakers, including pouch-type mid-to-low-cost solutions and cylindrical high-nickel products.
At its Ochang Energy Plant domestically, LG Energy Solution will continue next-generation product development and production preparations. Sodium-ion batteries will begin sample production for ESS this year, with test products for North American customers scheduled to be shipped next year.
Mass production of LFP-based Tabless 2170 cylindrical batteries is targeted for the first half of next year. Lee said, "We plan to actively respond to market changes while strengthening our strategy of selection and concentration to maximize operational efficiency with limited resources."
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