LG

Core Viewpoint - LG Energy Solution (LGES) reported a decline in revenue for Q2 2025, primarily due to fluctuations in raw material prices and policy impacts on North American energy storage batteries, despite stable EV battery sales [1][2]. Financial Performance - Revenue for Q2 2025 was 288.4 billion, a year-on-year decrease of 9.7% and a quarter-on-quarter decrease of 11.2%, with stable EV battery sales but a decline in North American energy storage revenue [1] - Gross margin improved to 18.8%, up 1.9 percentage points quarter-on-quarter; operating profit margin reached 8.8%, up 2.9 percentage points quarter-on-quarter, with Q3 benefiting from a US IRA subsidy of 25.4 billion (approximately 7.9 to 10.1 GWh of domestic production) [1] - Capital expenditure for Q2 was 140.8 billion, primarily for North American capacity expansion [1] 2025 Outlook - The company projects a revenue growth of 5% to 10% year-on-year for 2025, although the first half of 2025 saw a nearly 4% decline, indicating challenges ahead [2] - Demand for electric vehicles may slow in the short term, but advancements in autonomous driving technology and renewable energy projects are expected to drive long-term growth [3] - The PFE policy is increasing barriers to entry in the US market, enhancing the competitive advantage of companies with established local production and supply chains [3] Operational Developments - LGES is expanding energy storage battery capacity, with a new facility in Michigan officially starting production in Q2 2025, aiming to increase annual ESS battery capacity to 17 GWh by the end of the year and over 30 GWh by the end of 2026 in North America [4] - The company plans to begin mass production of mid-range battery products at its Poland factory in the second half of the year, including high-nickel and lithium iron phosphate (LFP) batteries [5] - LGES is enhancing its technological competitiveness by launching LFP batteries suitable for electric vehicles and energy storage, with plans to introduce batteries that can be charged in under 10 minutes by 2028 [6]