LG Energy Solution has announced its financial results for the first quarter of 2025, reporting a return to profitability driven by effective cost-cutting measures. The company recorded consolidated revenue of KRW 6.3 trillion, reflecting a 2.9 percent decrease compared to the previous quarter but a 2.2 percent increase year-over-year. Operating profit reached KRW 375 billion, achieving an EBITDA margin of 20 percent. This profit includes a KRW 458 billion tax credit from the Inflation Reduction Act (IRA).
“In the first quarter, we demonstrated solid shipments to North America and for newly launched EV models. However, as automakers continued their conservative approach to inventory management, our quarterly revenue declined compared to the last quarter,” said Chang Sil Lee, CFO of LG Energy Solution. “Nevertheless, we successfully returned to profitability in the first quarter as our efforts to reduce material costs and enhance cost efficiency came to fruition, with one-off items reflected in the previous quarter no longer playing base effect into Q1 profit,” Lee added.
During the quarter, LG Energy Solution reallocated its production capacity in North America to better align with market demands and address ongoing uncertainties. The company decided to postpone the construction of its energy storage system (ESS) battery plant in Arizona, opting instead to utilize its existing facility in Michigan. This strategic decision aims to begin production of lithium iron phosphate (LFP) batteries for ESS a year earlier than initially planned. Additionally, the company is in the process of acquiring the GM joint venture phase 3 in Michigan, which will significantly expand its presence in North America and maximize existing investments by minimizing facility downtime.
LG Energy Solution continued to strengthen its position in both the electric vehicle (EV) and ESS markets by expanding its customer base and securing new orders. The company received a new 10 GWh annual order from a leading North American automaker for its 46-Series cylindrical batteries. It also secured contracts with Polska Grupa Energetyczna (PGE) for grid-scale ESS batteries in Europe and Delta Electronics for 4 GWh of residential ESS batteries in the United States. Moreover, the company is exploring new applications, including solar EVs and offshore wind farms, and has established its first European battery recycling joint venture in France with Derichebourg. This facility will have an annual preprocessing capacity of 20,000 tons to comply with EU battery recycling regulations and ensure a stable metal supply chain.
Looking ahead, LG Energy Solution plans to focus on streamlining operations and reducing costs amidst regulatory changes such as U.S. tariffs and the EU’s industrial action plan for the automotive sector. The company aims to invest strategically, adjust capacity expansions according to market demands, manage EV battery inventory cautiously, and accelerate revenue growth in its high-potential ESS business. Additionally, LG Energy Solution will continue to develop new products and explore innovative applications for its cylindrical batteries, while promoting local production of raw materials in North America and advancing technologies like dry electrodes to lower production costs.
Source: LG Energy Solution
