SEOUL, July 25 (AJP) - LG Energy Solution has swung back to profitability without relying on U.S. subsidies for the first time in six quarters, an achievement the South Korean battery maker attributed to rising North American production and aggressive cost-reduction efforts.
The company reported on Friday that it posted a provisional operating profit of 492.2 billion won, or roughly $355 million, in the second quarter — up 152 percent from a year earlier.
Net income reached 90.6 billion won, reversing a loss, while revenue declined 9.7 percent to 5.57 trillion won ($4 billion), reflecting weaker demand and lower raw material prices.
Notably, even after excluding the 490.8 billion won in benefits from the U.S. Inflation Reduction Act’s advanced manufacturing production credit (AMPC), the company reported a modest operating profit of 1.4 billion won — its first profit on a pre-subsidy basis in a year and a half.
“Sales volume in North America increased on the back of steady EV battery shipments and the ramp-up of our new energy storage system plant in Holland, Michigan,” Lee Chang-sil, the company’s chief financial officer, said in a statement. “That said, weaker customer sentiment driven by policy uncertainty and falling metal prices weighed on overall revenue.”
Lee credited the return to profitability — excluding subsidies — to a higher share of premium, U.S.-linked production and a sweeping effort to rein in costs across operations, including cuts in materials and broader efficiency initiatives.
The turnaround comes as the company, a key supplier to General Motors and Tesla, works to diversify its customer base and battery offerings.
In June, LG Energy Solution secured its first cylindrical battery supply deal with China’s Chery Automobile, a move seen as a vote of confidence in the company’s 46-series cell technology.
The Holland plant, a critical piece of LG's North American strategy, has also begun mass-producing long-cell lithium iron phosphate (LFP) batteries, aimed at energy storage system applications.
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