LG Energy Solution Q4 2025 Earnings: Losses Halve Despite Global EV Slump
LG Energy Solution reported a narrowed Q4 2025 operating loss of 122 billion won. While EV demand remains weak, a pivot to ESS and AMPC tax credits are cushioning the blow.
The winter of EVs is biting hard, but the red ink is thinning. LG Energy Solution Ltd. reported that its fourth-quarter operating loss nearly halved compared to a year earlier, defying a harsh downturn in global electric vehicle battery demand.
Breaking Down the LG Energy Solution Q4 2025 Earnings
In a preliminary report released on Friday, LG Energy Solution estimated its operating loss for the October-December period at 122 billion won (US$83.8 million). This is a significant improvement from the 225 billion won loss posted in the same period of 2024. However, quarterly sales slipped 4.8% to 6.14 trillion won.
The company's performance was heavily cushioned by a tax credit of 332.8 billion won through the Advanced Manufacturing Production Credit (AMPC) under the U.S. Inflation Reduction Act. Without this federal support, the underlying operating loss would have ballooned to 454.8 billion won, reflecting the pain of reduced battery shipments to North America.
Annual Profit Surges: Pivoting Toward ESS
Despite the rocky end to the year, the full-year 2025 picture remains positive. Annual operating profit soared 133.9% to 1.34 trillion won, even as annual revenue dipped 7.6% to 23.67 trillion won.
With the North American EV market expected to remain in a slump through 2026, analysts suggest a strategic pivot. Lee Jin-myung, a researcher at Shinhan Securities, noted that the Energy Storage System (ESS) sector is poised for momentum. As North America seeks to decouple its supply chain from China, demand for non-Chinese ESS products is expected to create a turnaround opportunity for the Korean battery giant.
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