On the Dash:
- LG Energy’s first-quarter loss widened beyond expectations as EV demand weakened across major global markets.
- The company is accelerating its shift toward energy storage systems to offset declining EV battery demand.
- Analysts expect profitability to improve as ESS demand grows and the company capitalizes on its North American presence.
LG Energy Solution reported a wider-than-expected operating loss for the first quarter, as slowing EV demand in major markets offset gains from its growing energy storage business.
The South Korea-based battery maker posted an operating loss of 207.8 billion won, or about $138.1 million, for the three months ended March 31, according to a regulatory filing Tuesday. The result fell short of analysts’ expectations for a smaller loss of 140.5 billion won. Excluding U.S. tax credits tied to advanced manufacturing, the company said its operating loss would have widened to 397.5 billion won. Revenue fell 2.5% to 6.6 trillion won. However, final results are expected later this month.
The earnings miss comes as the global EV market shows signs of slowing, particularly in the United States and Europe. Policy changes in the U.S., including the rollback of EV tax credits and fuel-economy standards, have put pressure on automakers and suppliers alike. Major manufacturers have already flagged the financial impact. For instance, General Motors warned of billions in charges tied to production cuts, while Ford outlined notable restructuring costs and canceled key battery partnerships.
In Europe, shifting market conditions have also led to canceled agreements, adding to the uncertainty facing battery producers.
Despite headwinds, LG Energy is accelerating a strategic pivot toward energy storage systems, as demand rises alongside the expansion of AI-driven data centers and large-scale energy infrastructure. The company is converting EV battery production lines to increase energy storage capacity from 36 gigawatt-hours to at least 60 GWh, with a target of securing 90 GWh in new orders this year.
Shares of LG Energy closed 1% lower in Seoul ahead of the earnings release, though the stock has climbed nearly 14% over the past month, reflecting investor optimism around long-term growth in battery storage.
Analysts expect the first quarter to mark a low point for the company, with improving margins anticipated as demand for energy storage continues to strengthen.
