Trump tariff to dampen EV demand- LG Energy Solution
LG Energy Solution unveiled its Q2 2025 results, delivering an operating profit even before accounting for North American production incentives, thanks to a more profitable product mix and ongoing cost‐efficiency initiatives.
Consolidated revenue totaled KRW 5.6 trillion, down 11.2% from the prior quarter, while operating profit rose 31.4% to KRW 492.2 billion, representing an 8.8% margin. Included in that figure is an estimated KRW 490.8 billion in North American production incentives.
During its earnings call, the company noted that recent tariff and policy shifts in the U.S., Europe and U.K., coupled with rising automaker cost pressures, are likely to dampen EV demand in the near term. Looking further ahead, however, advances in autonomous-driving technology should catalyze mid- to long-term growth.
LG Energy Solution also sees strong upside in the energy-storage system (ESS) market, driven by both new and existing renewable-energy installations and AI data-center projects. The U.S. Inflation Reduction Act’s Investment Tax Credit is expected to accelerate a move toward non-Chinese battery suppliers, creating additional opportunities.
On the competitive front, tighter U.S. regulations will make it harder for prohibited foreign entities to enter the market favoring manufacturers with established local production and proven operational track records.
Building on its Q2 momentum, LG Energy Solution has begun producing ESS batteries at its first North American facility in Michigan and plans to increase annual ESS capacity to 17 GWh by year-end. In the near term, it will optimize utilization of existing lines prioritizing ESS products and new cell form factors while scaling back fixed costs and fine-tuning investments to strengthen its supply-chain position.
Regionally, the company aims to exceed 30 GWh of annual ESS capacity in North America by the end of 2026. In Europe, mass production of mid- to low-end cells (high-voltage mid-nickel and LFP) will commence at its Poland plant in H2 2025.
On the technology front, LG Energy Solution is broadening its mid-/low-end portfolio with LFP (EV/ESS) and lithium-manganese-rich (LMR) cells, while pushing energy-density improvements through novel materials and processes. It targets EV batteries capable of recharging in under 10 minutes by 2028.
