Original Coverage & Source Attribution: insideevs.com
- LG Energy Solution slowed down its electric vehicle battery production in North America due to low demand.
- Now losses related to that are being offset by strong growth in energy storage batteries for data centers and grid upgrades.
- Production credits in the U.S. and Europe’s record EV sales are also helping the battery maker’s bottom line.
Battery giant LG Energy Solution posted record quarterly earnings Thursday thanks to its burgeoning energy storage business in the U.S. and growing electric vehicle sales in Europe, the company said in a regulatory filing in South Korea.
It’s been a disruptive couple of years for battery makers in North America, as they’ve had to roll back their EV ambitions due to slower-than-expected sales. Many have offset those losses by tapping into a growing market for stationary energy storage batteries, which are in high demand due to power hungry AI data centers and grid upgrades.
Now the bet on stationary storage has started paying off for LGES, while strong plug-in vehicle sales in Europe have buoyed the company’s EV-battery business. Per preliminary results, the company’s third quarter revenue grew 59% year-over-year to $7.21 billion, and its operating profit grew 25% to $565 million. It will disclose the full official results in November.
LGES cylindrical battery cells.
Photo by: LGES
According to The Korea Herald, the battery company’s plant in Poland is seeing strong demand from Volkswagen and Renault’s growing EV sales in Europe. Here in the U.S., growth in AI data centers has spurred demand for its energy storage system (ESS) batteries, which it now produces locally at multiple U.S. plants.
The surge in earnings can also be attributed to battery-manufacturing credits the company received through the U.S. Inflation Reduction Act and compensation from automakers for failing to meet minimum EV battery purchase requirements, according to Reuters.
While the Trump administration’s One Big Beautiful Bill Act wiped out many pro-climate policies enacted under the Biden administration, including axing the federal tax credit and rolling back fuel economy rules, it largely preserved the Section 45X Advanced Manufacturing Production tax credits for domestic battery manufacturing. Those remain available through 2032.
LGES is also bringing more of its battery supply chain to North America. The company signed a multi-year offtake agreement with Canada’s Elevra Lithium on Thursday. As a part of that deal, LGES will receive 240,000 metric tonnes of raw lithium concentrate from Elevra’s mine in Quebec.
In August, the company also opened its $2 billion gigafactory in Lansing, Michigan—which InsideEVs had the chance to tour in person—where it is producing energy storage lithium-iron-phosphate batteries for Tesla and nickel-manganese-cobalt EV batteries for Toyota.
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