LG Energy Solution Q3 Profit Falls 39% Despite Revenue Growth

Seoul, South Korea- LG Energy Solution (373220. KS) reported a 38.7% year-over-year decline in third-quarter operating profit to KRW 448.3 billion (US$323 million).

The company posted consolidated revenue of KRW 6.88 trillion (US$4.95 billion), marking an 11.6% increase quarter-on-quarter but a 16.4% decrease year-on-year.

The operating profit included KRW 466 billion (US$336 million) in U.S. Inflation Reduction Act tax credits.

The company would have recorded a KRW 17.7 billion (US$13 million) operating loss excluding these credits.

Revenue growth was driven by increased European automaker sales, expanded production at North American and Indonesian facilities, and substantial ESS revenue growth from grid-scale projects.

The company secured new battery supply agreements totaling 160GWh during the quarter.

The agreements include a 50GWh cylindrical battery contract for North American EVs and 109GWh in pouch-type NCM battery orders for European commercial vehicles.

LG Energy Solution announced plans to start ESS battery production in the United States next year.

The company outlined three strategic initiatives for mid to long-term growth.

It will scale down capacity expansion and adjust ramp-up speed to maximize utilization rates of existing lines.

The company will reinforce R&D investment in differentiated material and process technologies, including the development of dry electrode technology, which is targeted for mass production in 2028.

It plans to establish a closed-loop recycling system and expand battery-as-a-service and energy-as-a-service businesses.

"While we expect unprecedented shifts in external environments, we will be nimble in responding to these changes through our comprehensive business strategy," said David Kim, CEO of LG Energy Solution.

The company will offer various chemistry choices, including LFP and High-Voltage mid-Ni, to support all EV segments.

Production at the Poland facility for commercial vehicle batteries is expected to start after the second half of 2026.

LG Energy Solution is developing multiple safety solutions, including advanced thermal propagation prevention technology for pouch-type batteries and optimized cooling module structure for cylindrical batteries.

(US$1 = KRW1,388.60)