LG Energy Solution plans to mitigate the impact of Donald Trump’s tariffs by streamlining operations and reducing costs across its business.
The company intends to prioritize essential investments while carefully adjusting the scale and timing of capacity expansions to align with shifting market conditions. LG Energy Solution is taking a prudent approach to managing EV battery inventories and aiming to boost revenue through its energy storage systems (ESS) segment, which offers strong growth potential.
Additionally, LG Energy Solution is securing long-term demand from major clients through new product offerings like 46-Series cylindrical batteries and is exploring emerging applications for these batteries in areas such as humanoid robots and drones.
To counteract tariff pressures, the company will promote local sourcing of raw materials through partnerships with materials firms expanding into North America and fast-track the implementation of cost-saving innovations, such as dry electrode technology.
Revenue
LG Energy Solution has posted its first-quarter 2025 earnings, returning to profitability through rigorous cost reduction initiatives.
Consolidated revenue reached KRW 6.3 trillion, reflecting a 2.9 percent decrease quarter-on-quarter but a 2.2 percent increase year-on-year.
Operating profit stood at KRW 375 billion, supported by an EBITDA margin of 20 percent and including KRW 458 billion in IRA tax credits.
Amid softer revenue driven by cautious inventory strategies among automakers, the company focused on optimizing cost efficiency and reducing material expenses, effectively offsetting the absence of one-off items seen in the previous quarter.
Strategically, LG Energy Solution paused construction of its ESS battery plant in Arizona to reallocate production to its Michigan facility, aiming to begin LFP battery production for ESS a year ahead of schedule.
It is also in the process of acquiring the GM JV phase 3 plant in Michigan, which will enhance its U.S. production capacity while leveraging prior investments with minimal downtime.
Key achievements include securing a 10GWh annual order for 46-Series cylindrical batteries from a major North American automaker, winning contracts for ESS battery supply to PGE in Europe and Delta Electronics in the U.S., and expanding into new energy applications such as solar EVs and offshore wind.
Additionally, LG Energy Solution launched its first European battery recycling JV with Derichebourg in France, targeting 20,000 tons of annual preprocessing capacity to comply with EU recycling mandates and strengthen its raw materials supply chain.
Baburajan Kizhakedath