Why did LG Energy Solution's Q2 operating profit miss analyst estimates, and what role did US EV policy changes play?

LG Energy Solution's Q2 operating profit missed analyst estimates—posting 113.3 billion won ($74 million) versus the expected 210.7 billion won—primarily because lackluster support for electric vehicles in key markets like the US failed to offset strong demand for energy storage systems (ESS). Crucially, the company stated that without US tax credits for advanced manufacturing, it would have recorded a 127.7 billion won loss, underscoring how sharply US policy shifts—such as the scaling back of EV tax credits and Biden-era fuel economy standards under political pressure—have undermined profitability. These policy headwinds compounded existing challenges including US tariffs and intense Chinese competition, directly contributing to the earnings shortfall.

How is LG Energy responding to slowing EV demand, and what specific strategic shifts in its production and contracts illustrate this pivot?

In response to slowing EV demand—evidenced by GM’s $6 billion EV-related charges and Ford’s termination of a 9.6 trillion won battery deal—LG Energy is accelerating its pivot to the energy storage system (ESS) market. The company is converting multiple EV production lines to boost ESS cell output from 36 GWh to at least 60 GWh, aiming to secure at least 90 GWh in new ESS orders this year. Concrete steps include signing a $1.6 billion deal with DTE Energy for six gigawatt-hours of ESS capacity in Michigan, securing a $4.3 billion contract for Tesla’s energy storage business, and launching mass production of ESS cells at its Ohio joint venture with Honda—originally built for EV batteries.

LG Energy Profit Misses Estimates as Slow EV Demand Hits

Jul 6, 2026

LG Energy Solution missed Q2 profit estimates due to weak US EV demand, though energy storage sales rose. The company is converting EV lines to boost ESS output for clients like Tesla and DTE Energy.

bloomberg

2026-07-06

LG Energy Profit Misses Estimates as Slow EV Demand Hits

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