LG Energy profit misses estimates as slow EV demand hits
The company has been accelerating its expansion into the fast-growing energy storage market
Published Tue, Jul 7, 2026 · 10:21 AM
[SEOUL] LG Energy Solution reported preliminary second-quarter earnings that missed analyst estimates, as lacklustre support for electric vehicles in key markets like the US failed to offset surging demand for energy storage systems (ESS).
Operating profit came in at 113.3 billion won (US$74 million) in the three months ended Jun 30, South Korea’s largest battery maker said in a regulatory filing on Tuesday (Jul 7). That fell short of analyst estimates of 210.7 billion won.
Without US tax credits for advanced manufacturing, the company would have posted a 127.7 billion won loss, the Seoul-based company said. Revenue jumped almost 25 per cent to 7.6 trillion won. Final results are due later this month.
LG Energy shares fell as much as 8.2 per cent in early Seoul trading, before paring some of the losses to be down around 4 per cent.
The lower-than-expected profit came despite a rebound in EV shipments to Europe and Asia driven by the Middle East energy crisis, US tariff refunds and a weaker Korean won.
The slowing EV transition in the US, where US President Donald Trump scaled back EV tax credits and Biden-era fuel economy standards, have complicated the outlook for South Korean battery makers already grappling with US tariffs and fierce Chinese competition.
General Motors has warned of US$6 billion in charges tied to EV production cuts. Ford Motor announced US$19.5 billion in costs from an EV overhaul and terminated a 9.6 trillion won battery deal with LG and another joint venture with SK Innovation’s battery unit.
To counter that, LG Energy has been accelerating its expansion into the fast-growing energy storage market, seeking to cater to rocketing demand from AI-driven data centres. The company is shifting multiple EV production lines to ramp up ESS cell output to at least 60 Gwh from 36 GWh, with the goal of winning at least 90 Gwh in new orders this year.
In May, LG Energy signed a US$1.6 billion deal with DTE Energy to develop energy storage systems in Michigan with a total capacity of six gigawatt hours, after securing a US$4.3 billion contract for Tesla’s energy storage business.
This week, LG’s joint venture with Honda Motor began mass production of ESS cells in its plant in Ohio, which was initially built to manufacture EV batteries.
While line conversion costs will continue to eat into LG’s margins for the time being, a turnaround is expected in the second half of this year with ESS revenue set to jump as much as 46 per cent from the first half, according to Shinhan Investment analysts including Jinmyung Lee.
“Despite the relatively low utilisation operating rate of US plants, the company will see earnings improvement thanks also to increasing EV volumes for Europe and strong cylindrical battery shipments to Tesla,” they said in a note ahead of the earnings announcement. BLOOMBERG
