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| LGES EV battery |
US EV Market Weakness Pressures LGES Shipments
LG Energy Solutions (LGES) reported a decline in EV battery sales as the US electric vehicle market slows. Its shipments fell over 10% due to cautious inventory management and weaker demand from major automakers. As a result, revenue dropped 7.6% year-on-year to 23.7 trillion won ($16.6bn) in 2025. Meanwhile, energy storage system (ESS) battery revenue surged 40%, partially offsetting EV market losses.
Strategic Shift Toward Energy Storage Systems
LGES is aggressively expanding its ESS business to counter subdued EV growth. Global ESS installations are projected to grow over 40% in 2026, potentially capturing half of North America's battery demand. The company repurposed idle EV production lines in Poland and South Korea, boosting ESS capacity by 50GWh. New lithium-iron-phosphate ESS production in the US further strengthens its market position.
Long-Term Prospects and Market Outlook
Despite near-term EV sales softness, LGES remains optimistic about autonomous vehicles and robotics driving future demand. Industrial electrification and AI data centers are increasing ESS consumption, supporting renewable energy integration. LGES expects total ESS capacity to nearly double to 60GWh in 2026 while maintaining a backlog exceeding 300GWh for EV batteries and 140GWh for ESS orders.
ScrapInsight Commentary
LGES’s EV battery sales decline highlights US market vulnerability, but ESS growth mitigates revenue risks. Repurposed EV lines and US ESS expansion position LGES for a leading role in North American energy storage. Short-term EV softness may persist, yet long-term electrification trends underpin strategic resilience.
