South Korea's LG Energy Solution Reports Q3 Net Loss As Prolonged EV Market Slowdown Hits Battery Demand

LG Energy Solution, South Korea's top battery manufacturer, reported a net loss for Q3 2021 due to a slowdown in the electric vehicle market. In the quarter ending September, the company incurred a net loss of 296.9 billion won, a significant drop from the 536.1 billion won profit in the same period last year. Despite this, operating profit increased by 25.7% to 756 billion won, driven by higher shipments of energy storage systems to North America and sales of affordable pouch-type batteries in Europe.

Sales for the quarter surged 59% to 9.64 trillion won, up from 6.06 trillion won a year earlier. The company also benefited from 416.9 billion won in tax credits under the U.S. Inflation Reduction Act's Advanced Manufacturing Production Credit (AMPC) program. Excluding AMPC benefits, LGES reported a 339.1 billion won operating profit for the quarter.

For the full first nine months of 2021, LG Energy Solution reported a net loss of 1.57 trillion won, up from a 853.3 billion won profit in the same period last year. Operating profit fell 54.9% to 661.6 billion won, down from 1.47 trillion won a year ago. Sales for the first nine months rose 26% to 23.75 trillion won, compared to 18.84 trillion won in 2020.