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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] South Korea’s three major battery manufacturers are reporting losses once again, repeating a pattern seen just a year ago.
Sluggish demand for electric vehicles (EVs) in North America and Europe has raised concerns that these profit declines may not be temporary but indicative of a structural slowdown.
Delays in production ramp-up, high fixed costs, and expenses associated with expanding energy storage system (ESS) production lines make a short-term recovery in earnings unlikely for all three companies.
According to data from FnGuide on January 8, securities firms estimate LG Energy Solution posted fourth-quarter 2025 revenue of KRW 5.8 trillion and an operating loss of KRW 60 billion. Compared with the previous year, sales fell 10.64%, and the company swung into the red on operating profit.
Analysts point to low utilization rates at European plants and fixed cost burdens caused by halts and workforce reductions at the U.S. Ultim Cells factory as major factors behind the weak performance. Reduced sales to General Motors (GM) have also directly impacted revenue, lowering the proportion of higher-priced products and premium clients.
Additional factors include costs related to converting production lines for ESS battery output and ramping up newly expanded lines. LG Energy Solution aims to achieve global ESS battery capacity of over 50 GWh by the end of this year.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
