LG Energy Solutions is one of the US producers of LFP batteries, a technology largely dominated by Chinese companies. The company stated that they are converting some of its US EV battery lines to start producing ESS in response to declining EV demand. LGES shares increased by 1.5%, even though the wider market fell by 1.4%.
LG Energy Solution, a battery manufacturer, announced that its third-quarter operating profit is expected to increase by 34%, as US consumers rush to buy electric cars to take advantage of government incentives that ended on September 30.
The South Korean company, which supplies batteries for General Motors and Tesla electric cars. It estimated its operating profit was 601 billion won ($420 million) for the July to September period, an increase from 448 billion won a year earlier.
The figure surpassed the 528 billion won profit, which was predicted by LSEG SmartEstimate, a model that provides a more accurate forecast of future earnings than the simple average of all analyst estimates.
Analysts believe that the company will earn profits due to the spike in US EV sales as buyers want to make use of the $7,500 federal tax credit, which is going to expire soon.
LGES warned that EV demand may slow down by early next year as the US tax credits and import tariffs imposed by President Donald Trump will soon be phased out. The company’s major customers, Tesla and General Motors, have warned about the negative impact of US tariffs and the end of federal EV subsidies.
Despite these challenges, LGES expects to improve its profits in the second half of the year by increasing production of batteries for energy storage systems (ESS) to offset weak EV demand, while cutting or delaying investment plans.
LGES is one of the US producers of LFP batteries, a technology largely dominated by Chinese companies. The company stated that they are converting some of its US EV battery lines to start producing ESS in response to declining EV demand. LGES shares increased by 1.5%, even though the wider market fell by 1.4%.
The company stated in a regulatory filing that it would have made an operating profit of 236 billion won, excluding the US battery manufacturing incentives it received under the Inflation Reduction Act. The company will release its detailed earnings statement on October 30.
LGEs even signed a $4.3 billion deal to supply Tesla, offsetting the weak demand for electric cars, as the automaker wanted to reduce its dependence on Chinese imports due to increasing tariffs. Last week, the company made plans to increase sales of storage batteries, as there was growing global demand for power from data centres, as companies are fast-moving towards AI.
Tesla Chief Financial Officer Vaibhav Taneja stated in April that US tariffs have a significant impact on Tesla’s energy business, as the company sources LFP batteries from China.
In September, LGES faced a setback while constructing a joint battery plant with Hyundai Motor in the US. It was stopped after an immigration raid was made at the Georgia site, leading to many South Korean workers being arrested.
Hyundai Motors CEO Jose Munoz stated that the factory construction would be delayed for two to three months due to the raid.
Earlier this month, the company announced that it would gradually allow its staff and subcontractors to take US business trips, after the US President Trump administration’s announcement that South Korea can work on equipment at US sites under existing temporary visas. According to South Korea’s foreign ministry, the United States has agreed to allow South Korean workers to work at US investment sites under current visas and plans to open new channels for business travel. However, at a recent working group meeting, US officials did not provide any solutions when South Korea requested to have more access for its specialty worker visas, despite the US reaffirming its commitment to strengthening its trade and investment ties.
