Under consolidation, LG Energy Solution's sales last year came to 23.6718 trillion won, down 7.6% from a year earlier due to the end of U.S. electric vehicle subsidies and the resulting slowdown in EV adoption. However, with full-scale production of energy storage systems (ESS), centered in North America, and a sales strategy focused on high-margin products, operating profit rose 133.9% year over year to 1.3461 trillion won.
On the 29th, LG Energy Solution said in its fourth-quarter 2025 earnings conference call that fourth-quarter sales last year were 6.1415 trillion won and it posted an operating loss of 122 billion won. Compared with a year earlier, fourth-quarter sales fell 4.8%, and the operating loss narrowed by 45.9%. The subsidies reflected in the fourth quarter under the U.S. Inflation Reduction Act's advanced manufacturing production credit (AMPC) totaled 332.8 billion won. Excluding the subsidies, the fourth-quarter operating loss was 454.8 billion won.
Vice President Lee Chang-sil, chief financial officer (CFO) of LG Energy Solution, said on the conference call, "With demand conditions broadly weakening due to various policy changes affecting the pace of EV electrification last year, companywide sales fell 7.6% from a year earlier, while operating profit increased 133.9% thanks to a sales strategy centered on high-margin products and the full-scale launch of North American ESS production."
◇ ESS production capacity to expand to more than 60 GWh by the end of this year
LG Energy Solution expects the EV market to contract this year and plans to target the North American ESS market in response. To that end, LG Energy Solution will accelerate the conversion of existing U.S. EV lines to ESS.
Lee said, "Driven by industry-wide electrification, increased heating and cooling demand due to climate change, and the expansion of AI-related data centers, the global ESS market is entering a phase of structural growth, and in particular, ESS installations this year will increase more than 40% from a year earlier."
Lee set this year's new order target above last year's record 90 gigawatt-hours (GWh). In response, the company plans to nearly double ESS battery production capacity to more than 60 GWh by the end of the year.
Lee said, "We will utilize EV lines at the standalone plants in Holland and Lansing, Michigan, as well as at the joint plants with Stellantis and Honda," adding, "We have begun mass production (of ESS batteries) at the Holland plant and the Stellantis joint plant; at the Lansing plant we plan to begin production in the first half of this year; and at the Honda joint plant we plan to begin mass production within the year once the scale and timing of the conversion are finalized." Lee added, "In Europe, we began producing mid- to low-priced products such as high-voltage mid-nickel and lithium iron phosphate (LFP), and we have been shipping to customers since the fourth quarter of last year."
◇ Expanding supply of the 46 series, developing sodium and solid-state batteries
The company will also expand supply of the new cylindrical 46 series. LG Energy Solution plans to unveil the 46 series within the year and, starting at year-end, operate its new Arizona plant to fulfill North American orders. Lee said, "The cylindrical 46 series, which has been recognized for its differentiated value, began shipments in the fourth quarter of last year, and as of the end of last year we secured an order backlog of more than 300 GWh."
The company is also moving to prepare new businesses and future technologies. Regarding the robotics market, Lee said, "Recognized for our cylindrical battery technology, we completed orders from six companies with globally leading technologies and are supplying high-nickel NCM cylindrical batteries," adding, "For next-generation models, we are discussing specifications and mass production timing, and we will continue to strengthen cooperation with high-potential customers."
◇ "Sales to grow in the mid-teens to 20% range this year"
This year, LG Energy Solution is targeting sales growth in the mid-teens to 20% range from last year. Despite a decline in sales of pouch-type EV batteries, the company plans to achieve companywide sales growth through strong growth in small cells, including the 46 series, and the ESS business.
For profitability, the company plans to expand operating profit from a year earlier through operational efficiency and cost reductions. It will reduce investment in production facilities by more than 40% from a year earlier and focus on utilizing existing assets, such as line conversions, and on cash flow management to strengthen financial soundness.
Kim Dong-myung, CEO of LG Energy Solution, said, "The global battery market has entered a 'value shift' period in which value is being reorganized beyond EVs into various industries such as energy storage systems," adding, "This year, we will translate our efforts—such as portfolio rebalancing and operational efficiency—into tangible results, and through intense focus, we will turn opportunities into outcomes."