Quick Takeaways
- LG Energy Solution Q4 2025 operating loss highlights how sharply EV battery demand has cooled despite U.S. production tax credits.
- LG Energy Solution Q4 2025 results also show how energy storage systems are becoming a key buffer for battery makers.
On January 9, LG Energy Solution (LGES) released its preliminary Q4 2025 financials, reporting a notable LG Energy Solution Q4 2025 operating loss as electric vehicle battery demand weakened and several OEM supply contracts were either scaled back or cancelled. The company recorded an operating loss of KRW 122 billion, equal to around USD 83 million, marking a significant setback for the world’s leading EV battery suppliers.
Although the quarter remained in the red, the loss was less than half of the KRW 225 billion deficit posted in Q4 2024, showing that LG Energy Solution has been able to contain some of the impact from the slowdown in the global electric vehicle market.
LG Energy Solution Q4 2025 Operating Loss and Revenue Trends
Revenue performance also reflected the softer EV environment. LG Energy Solution reported Q4 2025 sales of KRW 6.14 trillion, representing a 4.8 percent year-on-year decline as battery shipments to automakers slowed. Net profit figures have not yet been released, but the revenue dip underlines how closely LGES remains tied to OEM demand cycles.
A key factor supporting the quarter was a sizeable government incentive.
LG Energy Solution received KRW 332.8 billion through the Advanced Manufacturing Production Credit under the U.S. Inflation Reduction Act, which directly improved operating results.
Without this support, the LG Energy Solution Q4 2025 operating loss would have been far deeper, with the company estimating a deficit of KRW 454.8 billion on a purely operational basis.
Impact of U.S. EV Policy Shifts on LG Energy Solution Q4 2025 Operating Loss
While the AMPC program continues, many other forms of U.S. support for electric vehicles have been reduced or removed. These include:
The rollback of these policies after September 2025 weakened EV demand in the U.S., one of LGES’s most important markets, and directly contributed to the LG Energy Solution Q4 2025 operating loss.
Full-Year Outlook Despite LG Energy Solution Q4 2025 Operating Loss
Despite the difficult fourth quarter, LG Energy Solution expects its full-year 2025 operating profit to reach KRW 1.34 trillion, representing a 134 percent increase over 2024. The company benefited from strong EV battery orders earlier in the year before U.S. incentives were scaled back, allowing it to maintain solid profitability on an annual basis.
This contrast between a strong first half and a weak final quarter highlights the growing volatility facing the global EV battery market.
Energy Storage Systems Offset EV Battery Weakness
To manage reduced demand for battery electric vehicles, LG Energy Solution and its peers are accelerating their push into energy storage systems. ESS applications for grid stabilization, renewable energy integration, and commercial backup power are expanding quickly, providing an alternative growth engine when EV sales slow.
Major battery suppliers and automakers are now treating ESS as a strategic priority, helping to stabilize factory utilization and revenue streams during periods of weak EV demand.
As the EV market recalibrates to shifting policy and consumer conditions, LG Energy Solution’s ability to balance electric vehicle batteries with large-scale energy storage will be critical in limiting future operating losses and sustaining long-term growth.
Although the quarter remained in the red, the loss was less than half of the KRW 225 billion deficit posted in Q4 2024, showing that LG Energy Solution has been able to contain some of the impact from the slowdown in the global electric vehicle market.
LG Energy Solution Q4 2025 Operating Loss and Revenue Trends
Revenue performance also reflected the softer EV environment. LG Energy Solution reported Q4 2025 sales of KRW 6.14 trillion, representing a 4.8 percent year-on-year decline as battery shipments to automakers slowed. Net profit figures have not yet been released, but the revenue dip underlines how closely LGES remains tied to OEM demand cycles.
A key factor supporting the quarter was a sizeable government incentive.
LG Energy Solution received KRW 332.8 billion through the Advanced Manufacturing Production Credit under the U.S. Inflation Reduction Act, which directly improved operating results.
Without this support, the LG Energy Solution Q4 2025 operating loss would have been far deeper, with the company estimating a deficit of KRW 454.8 billion on a purely operational basis.
Impact of U.S. EV Policy Shifts on LG Energy Solution Q4 2025 Operating Loss
While the AMPC program continues, many other forms of U.S. support for electric vehicles have been reduced or removed. These include:
- Consumer tax credits for EV purchases
- Government funding for charging infrastructure
- CAFE emission standards and related regulatory incentives
The rollback of these policies after September 2025 weakened EV demand in the U.S., one of LGES’s most important markets, and directly contributed to the LG Energy Solution Q4 2025 operating loss.
Full-Year Outlook Despite LG Energy Solution Q4 2025 Operating Loss
Despite the difficult fourth quarter, LG Energy Solution expects its full-year 2025 operating profit to reach KRW 1.34 trillion, representing a 134 percent increase over 2024. The company benefited from strong EV battery orders earlier in the year before U.S. incentives were scaled back, allowing it to maintain solid profitability on an annual basis.
This contrast between a strong first half and a weak final quarter highlights the growing volatility facing the global EV battery market.
Energy Storage Systems Offset EV Battery Weakness
To manage reduced demand for battery electric vehicles, LG Energy Solution and its peers are accelerating their push into energy storage systems. ESS applications for grid stabilization, renewable energy integration, and commercial backup power are expanding quickly, providing an alternative growth engine when EV sales slow.
Major battery suppliers and automakers are now treating ESS as a strategic priority, helping to stabilize factory utilization and revenue streams during periods of weak EV demand.
As the EV market recalibrates to shifting policy and consumer conditions, LG Energy Solution’s ability to balance electric vehicle batteries with large-scale energy storage will be critical in limiting future operating losses and sustaining long-term growth.
Company Press Release
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