KB News Desk
Battery maker doubles down on North America with ESS expansion, localized supply chain
LG Energy Solution posted record quarterly revenue in the third quarter, fueled by stronger electric vehicle battery shipments in Europe and rapidly growing demand for energy storage systems in North America.
The battery maker said Thursday that preliminary revenue reached 9.64 trillion won ($7.21 billion), up 59 percent from a year earlier and 27.6 percent from the previous quarter. Operating profit rose 25.7 percent on-year and more than sixfold from the second quarter to 756 billion won.
Excluding an estimated 416.9 billion won in US Inflation Reduction Act tax credits, operating profit stood at 339.1 billion won.
LG Energy Solution attributed the record sales to steady EV battery growth and a sharp expansion in its North American ESS business. European demand for mid-nickel batteries remained solid, while production increased following the restart of its General Motors joint venture and the launch of its Hyundai Motor Group joint venture. Cylindrical battery shipments also remained steady.
Profitability improved as surging North American ESS shipments lowered the burden of fixed costs, while increased deliveries of mid- and lower-priced EV pouch cells lifted utilization rates at the company’s European plants. One-off compensation payments from automakers also supported earnings.
The company expects momentum to continue as North American ESS production ramps up and EV battery demand recovers in the second half.
LG Energy Solution previously forecast that its North American ESS output would double in the second half, helping keep its target of 20 percent annual revenue growth within reach.
Analysts also see ESS as an increasingly important growth driver.
DB Financial Investment said LG Energy Solution’s expanding US ESS footprint aligns with Washington’s push to strengthen grid security, putting the Korean battery maker in more direct competition with companies such as Tesla and Fluence Energy.
Shinyoung Securities said rapid North American expansion and US Advanced Manufacturing Production Credit benefits should continue to support earnings. It pointed to steady shipments of high-voltage mid-nickel and lithium iron phosphate batteries for Volkswagen and Renault as helping raise utilization at LG Energy Solution’s Polish plant.
The battery maker is also strengthening its North American supply chain as it expands production.
LG Energy Solution recently signed a four-year agreement with Canada-based Elevra Lithium to secure 240,000 tons of lithium spodumene concentrate from late 2026. The material will be sourced from a mine in Quebec.
The volume is equivalent to about 30,000 tons of lithium hydroxide, enough for high-performance batteries for roughly 700,000 electric vehicles, according to the company.
LG Energy Solution said securing lithium at the upstream stage gives it greater flexibility to respond to shifting demand between EV and ESS applications.
The strategy supports a growing North American manufacturing network as AI data centers, renewable energy and grid investment drive demand for energy storage.
LG Energy Solution operates or is developing five key manufacturing hubs in the region, including two plants in Michigan and one in Ontario, as well as joint venture facilities with Honda in Ohio and GM in Tennessee.
The company plans to expand its North American production capacity for lithium iron phosphate cells used in ESS applications to more than 50 gigawatt-hours by the end of this year.
