A Samsung SDI energy storage system equipped with lithium iron phosphate batteriesSAMSUNG SDI
Korea’s three largest battery makers all posted quarterly operating profits for the first time since the third quarter of 2024.
Helped by growing sales of batteries for energy storage systems (ESS), the results suggest the industry may be moving past the worst of the EV slump.
LG Energy Solution reported second quarter revenue of 7.56 trillion won ($5.3 billion) and an operating profit of 113.3 billion won on Thursday. Samsung SDI posted revenue of 3.77 trillion won and an operating profit of 203.8 billion won. SK On’s battery business recorded revenue of 2.95 trillion won and an operating profit of 821.8 billion won, returning to profit for the first time since the third quarter of 2024.
ESS drove the recovery. Demand for ESS batteries is rising quickly in North America as AI data centers multiply and renewable power generation expands, and the three companies are converting parts of their U.S. EV battery plants for ESS production.
The strategy allows them to use existing factories, reducing both investment costs and conversion time, while still securing benefits under the U.S. advanced manufacturing production tax credit.
LG Energy Solution is scaling up ESS battery production across its U.S. manufacturing network in Michigan, Tennessee and other states. Samsung SDI is converting part of its EV battery production lines at its Kokomo plant in Indiana to make ESS batteries. SK On is also weighing a similar shift at its Georgia facility.
The three companies expect ESS to keep driving performance improvements in the second half of the year.
LG Energy Solution’s battery container for grid-scale energy storage systemsLG ENERGY SOLUTION
LG Energy Solution said its ESS shipments in the third quarter should rise more than 50 percent from the April-to-June period as new production facilities in North America come online. Samsung SDI is preparing to mass-produce lithium iron phosphate (LFP) batteries in the United States, which offer strong price competitiveness and safety. SK On also plans to expand its customer base to include AI hyperscalers and utility companies to secure more orders.
Whether ESS can serve as a lasting lifeline for the battery industry remains an open question. Tesla cited falling average selling prices and intensifying competition in the ESS market as risks during its recent second quarter earnings call. The U.S. company’s ESS deployments climbed 53 percent from the previous quarter, but its energy business’ gross margin dropped sharply, from 39.5 percent to 20.4 percent.
The falling average selling price Tesla cited refers to the price of finished ESS products. If price competition among finished-product makers intensifies, the cost-cutting pressure could spread to battery cell makers and drag down their selling prices and profitability.
“The price premium that ESS products once commanded is gradually disappearing as the market matures,” an industry source said. “Future competitiveness will depend on securing profitability in both EVs and ESS, finding new sources of demand such as humanoid robots and becoming the first to commercialize next-generation technologies such as solid-state batteries.”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
