LG Energy Solution reports 756B won quarterly operating profit

North American production incentives were equivalent to more than half of a battery maker's third-quarter operating profit as energy-storage shipments expanded. LG Energy Solution KRX373220, the South Korean manufacturer of batteries for electric vehicles and energy storage, reported operating profit of 756 billion won on revenue of 9.6 trillion won on Nov. 3.

Its KRX373220 shares fell to 338,000 won at Tuesday’s 3:30 p.m. KST close in Seoul.

Revenue increased 27.6 per cent from the preceding quarter, according to the company's Nov. 3 release. The total included 416.9 billion won in North American production incentives, which LG Energy Solution linked to volume growth led by regional energy-storage shipments.

The company plans to convert additional EV pouch-battery lines to storage production and add prismatic storage lines. Its Nov. 3 targets put North American storage-battery capacity above 70 gigawatt-hours by the end of 2027, alongside more than 20 gigawatt-hours of cylindrical battery capacity.

Production Incentives Exceed Half Of Operating Profit

The third-quarter incentive was equivalent to about 55 per cent of reported operating profit, calculated from the disclosed figures. Subtracting the incentive leaves 339.1 billion won; that arithmetic separates the contribution without treating the full reported profit as earnings from battery sales alone.

LG Energy Solution reported an operating margin of 7.8 per cent for the quarter in its Nov. 3 announcement. The release attributes improved profitability to better European plant utilization, growing cylindrical-battery volumes and a lower fixed-cost burden as North American storage capacity gradually stabilized.

The demand signals extend across both businesses. Storage shipments increased significantly, while higher shipments of EV pouch batteries were led by high-voltage, mid-nickel products. The company also reported continued solid supply of its 21- and 46-Series cylindrical EV batteries during the third quarter.

For Europe, LG Energy Solution said it increased volumes and extended supply periods under existing contracts for high-voltage, mid-nickel Gen2 batteries. The Nov. 3 release did not give a separate revenue or operating-profit figure for EV batteries and storage, limiting the comparison between the two businesses.

The same release said customer demand improved utilization at the Polish plant. In North America, it reported completion of a new link production line in Arizona and phased expansion of pack-production capacity in Ohio, alongside diversification of lithium iron phosphate cathode suppliers.

Storage Expansion Includes Data Centre Supply

LG Energy Solution said on Nov. 3 that it had secured its first direct-supply, behind-the-meter battery-storage project for a big technology customer. The announcement did not disclose the customer's identity, contract value, storage capacity or delivery schedule, so the project cannot yet be assigned a quantified revenue contribution.

The Nov. 3 roadmap also calls for tabless 2170 battery lines for hybrid electric vehicles starting in 2027. In Korea, the company plans to use its mother factory to develop new products, with high-power lithium iron phosphate 2170 batteries aimed at new applications from 2027.

The company is also changing procurement as it expands. Its Nov. 3 release describes plans to broaden its North American lithium iron phosphate cathode supplier base to at least four suppliers and localize key materials and components in Europe.

"LG Energy Solution plans to increase direct metal purchasing and expand supply of key materials to suppliers for greater operational flexibility, while leveraging mid- to long-term volumes to strengthen raw material procurement competitiveness," the company said in its earnings release.

The broader electrical-equipment market is expanding too. As Mugglehead reported on Nov. 3, Eaton Corporation plc NYSEETN, the power-management equipment manufacturer, reported combined electrical backlog growth of 46 per cent from a year earlier. Its third-quarter sales reached US$8.9 billion, up 28 per cent.

Read more: Eaton raises 2026 growth outlook as electrical backlog climbs 46 per cent

LG Energy Solution's North American capacity figures remain targets for the end of 2027, rather than measures of current output. Its European plan stretches further: the Nov. 3 announcement calls for local 46-Series cylindrical production lines by 2029.

The nearer operating test is scheduled for the end of 2026, when LG Energy Solution plans to begin U.S. production of 46-Series cylindrical batteries. It also aims to produce sodium-ion battery samples in Korea by the end of 2026 for proof-of-concept testing with a key storage customer.