LG Energy Solution Considering ESS Production at North American Plants... Q3 Operating Profit Up 34% Year-on-Year (Comprehensive)

Solid Performance Amid EV Slowdown, Driven by ESS Growth
Discussions Underway to Expand ESS Production at Canadian Stellantis Joint Venture
Accelerating 'Line Conversion' Amid EV Slowdown... "Swift Response to Shifting Demand"

LG Energy Solution is restructuring the production portfolio of its local joint venture plants in North America in response to the slowdown in electric vehicle demand in the region. The company is officially considering converting some of its existing vehicle battery-focused production lines to energy storage system (ESS) lines, targeting the rapidly growing ESS market.

LG Energy Solution Poland Wroclaw Plant. LG Energy Solution

On October 30, during its third-quarter earnings conference call, LG Energy Solution stated, "We have completed preparations for full-scale cell mass production at our joint venture plant with Stellantis in Canada and have further strengthened our ability to respond to the North American market. As demand in downstream markets is changing faster than initially expected, we are also discussing the direction of ESS product production at this site." The company added, "We plan to finalize discussions as soon as possible to accelerate our response to growing ESS demand and maximize production capacity to meet North American demand."

LG Energy Solution sees explosive growth in power grid ESS demand, driven by a surge in data center investments in the United States, and believes that policy uncertainty has been resolved with the continuation of tax credits under the Inflation Reduction Act (IRA). The company forecasts that the global ESS market will grow at an average annual rate of over 20% between 2024 and 2028.

With expanded shipments of high-capacity ESS batteries from its Ochang plant in Cheongju, Korea, and its plant in Poland, the share of ESS sales in total revenue surpassed 25% for the first time. Starting in the second half of this year, LG Energy Solution has been closely inspecting production lines at its North American bases in Michigan, Ohio, and Canada, and plans to convert some lines to ESS production if necessary to maximize supply. Through this, the company intends to flexibly adjust its existing electric vehicle-focused production system and expand its business scope to focus on North American data center and power grid projects.

In the third quarter of this year, LG Energy Solution recorded an operating profit of 601.3 billion won, a 34.1% increase from 448.3 billion won in the same period last year. Although revenue decreased by 17.1% to 5.6999 trillion won from 6.8778 trillion won a year earlier, profitability improved due to strong ESS business performance and the effect of tax credits.

On March 5th, at the LG Energy Solution booth at InterBattery 2025 held at COEX in Gangnam-gu, Seoul, a model of the underside of an electric vehicle equipped with the 46-series battery was exhibited. Photo by Yonhap News

From the fourth quarter, LG Energy Solution will begin full-scale mass production of next-generation cylindrical "4680" batteries and high-density pouch cells. Through these products, the company plans to simultaneously secure high-value electric vehicle customers and achieve its goal of increasing the share of ESS in its business.

This content was produced with the assistance of AI translation services.