LG Energy Solution returned to profitability in the second quarter of 2024, reversing a loss from the prior period as its strategic bets on European electric vehicle battery production and U.S. battery energy storage deployments began delivering returns. The South Korean manufacturer’s geographic diversification — supplying automakers in Europe while capitalising on Inflation Reduction Act-driven storage demand in America — has insulated it from the uneven pace of global EV adoption.
The earnings turnaround reflects a deliberate shift in capital allocation. After years of aggressive capacity expansion tied to optimistic EV uptake forecasts, LG Energy Solution recalibrated its investment pace in late 2023, prioritising higher-margin projects and delaying some greenfield plants. That discipline, combined with a product mix weighted toward mid- to high-nickel chemistries favoured by European OEMs, improved factory utilisation rates at its Poland and Hungary facilities.
In the United States, the company’s joint venture with Honda and its standalone Arizona factory are ramping to serve both EV and stationary storage markets. But the near-term profit driver has been the BESS segment, where LG Energy Solution holds a leading market share. Utility-scale procurement accelerated in the first half of 2024 as developers raced to secure modules ahead of anticipated supply chain constraints and to qualify for domestic content bonuses under the IRA.
The results underscore a broader industry dynamic: battery makers with exposure to both mobility and stationary storage are weathering the current EV demand deceleration better than pure-play cell suppliers. As automakers in Europe and North America adjust production schedules, the ability to redirect cell output to storage projects — which face fewer demand cyclicality risks — provides a valuable hedge. LG Energy Solution’s next test will be sustaining margins as legacy contracts roll over and pricing pressure intensifies in both segments.
Read the full report at Energy Storage News