It appears that the three battery makers, LG Energy Solution, Samsung SDI, and SK On, which had been enduring a lean season due to a prolonged chasm—temporary demand stagnation—in the electric-vehicle (EV) market, staged a counterattack in the second quarter by using energy storage systems (ESS) as a lever. Analysts say surging demand for grid stabilization driven by the expansion of artificial intelligence (AI) data centers, together with the U.S. advanced manufacturing production credit (AMPC), is boosting results.
According to the industry on the 6th, LG Energy Solution is set to announce second-quarter results on the 7th. Samsung SDI and SK Innovation (SK On) are coordinating their earnings release schedules for the last week of this month.
Brokerages expect LG Energy Solution to have swung to a profit in the second quarter. According to financial data firm FnGuide, the domestic securities community's second-quarter operating profit consensus for LG Energy Solution, compiled from forecasts over the past month, came to 205.2 billion won.
LG Energy Solution posted operating losses of 122 billion won in the fourth quarter of last year and 207.8 billion won in the first quarter of this year, delivering weak results. ESS underpins the second-quarter improvement at LG Energy Solution. As production of commercial and grid-scale ESS batteries increases, the amount received under AMPC is set to rise.
AMPC is effectively a cash subsidy program by the U.S. government for corporations that produce battery cells and modules locally. Lee Jin-myeong, an analyst at Shinhan Investment & Securities, said, "With rising ESS output in the United States, the AMPC amount for the second quarter alone is expected to reach 262 billion won, up 38% from the previous quarter (189.8 billion won)."
Meritz Securities' research center estimated LG Energy Solution's second-quarter AMPC at 228.4 billion won, while Korea Investment & Securities Co. put it at 226 billion won.
Refunds following the U.S. Supreme Court's ruling against reciprocal tariffs are also expected to aid profitability. LG Energy Solution applied for refunds of about 300 billion won and is said to have received roughly 100 billion won back.
Samsung SDI also looks likely to return to the black for the first time in seven quarters. After logging an operating loss of 591.3 billion won in the third quarter of last year, the company narrowed its losses to 299.2 billion won in the fourth quarter and 155.6 billion won in the first quarter of this year. iM Securities estimated second-quarter operating profit at 7 billion won.
Part of the line at StarPlus Energy, the U.S. Indiana joint venture with Stellantis, was converted to nickel cobalt aluminum (NCA) ESS production, which appears to have positively affected results. A surge in demand for battery backup units (BBU) for AI servers likely improved profitability in small batteries as well.
Many also expect SK On's second-quarter results to have improved. Unlike the others, however, the losses are merely shrinking. KB Securities' research center estimated the battery institutional sector's second-quarter operating loss, including AMPC, at 215 billion won. LS Securities and iM Securities projected second-quarter operating losses at 196 billion won and 303 billion won, respectively. In the first quarter, the battery institutional sector's operating loss was 329.2 billion won.
ESS sales are not reflected in SK On's second-quarter results. Battery sales for EVs are estimated to have increased. Starting in the third quarter, SK On plans to begin ESS production using its U.S. local plants. The company's global ESS order target for this year is more than 20 GWh. The plan is to repurpose idle facilities for ESS to raise utilization and maximize AMPC subsidies. It is also making an all-out push for orders of lithium iron phosphate (LFP) batteries.
U.S. policies to counter China underpin ESS's emergence as a relief pitcher for the battery industry. With the U.S. administration imposing high tariffs on Chinese ESS and strictly limiting the ratio of parts and critical minerals sourced from foreign entities of concern (FEOC), the market has opened wide for Korean corporations that are non-Chinese.
The outlook is relatively bright. According to the American Clean Power Association (ACP), new ESS installations in the United States reached 8.4 gigawatt-hours (GWh) in the first quarter, a record high for a first quarter. Global research firm GGII forecast explosive growth in ESS battery shipments for AI data centers, from 12 GWh in 2025 to 272 GWh in 2030.
That said, corporations continue to say that substantial government support is needed for Korea's battery industry to revive. The crux is the need for direct refunds among tax support measures. Most domestic battery cell, materials, and parts companies are currently in the red. No matter how high the tax credit rate is, if there is no tax due, they cannot benefit, which is why they want direct refunds.
A battery industry source said, "Korea's battery industry tends to depend on external policy variables such as the U.S. Inflation Reduction Act (IRA) and the Industrial Acceleration Act (IAA) in Europe," adding, "Just as the Chinese government and corporations move as 'Team China,' Korea also needs to form a joint government-corporate task force (TF) to craft comprehensive support policies."