LG Energy Solution reported a reduced operating loss in the fourth quarter of 2025, signaling improved financial performance despite ongoing challenges in the electric vehicle battery sector. The results reflect progress in cost optimization and demand stabilization for energy storage solutions.
- LG Energy Solution’s Q4 2025 operating loss narrowed to KRW 128 billion from KRW 215 billion in Q4 2024.
- 15% year-over-year growth in energy storage system (ESS) sales volume driven by North American and European demand.
- LGES supplies 38% of General Motors’ U.S. EV battery needs, reinforcing its strategic OEM partnerships.
- Tesla (TSLA) and GM remain key customers, contributing to stable revenue despite sector-wide margin pressures.
- Improved production efficiency and cost control were primary drivers behind the loss reduction.
- Stocks of LGES and its U.S. ADR (LNVGY) rose 4.2% and 3.6%, respectively, on the news.
LG Energy Solution (LGES) reported a Q4 2025 operating loss of KRW 128 billion, narrowing from KRW 215 billion in the same period the prior year. This improvement marks a significant step toward financial stabilization for the South Korean battery manufacturer, which has faced margin pressures due to oversupply and intense competition in the EV battery market. The reduction in losses was driven by lower production costs, higher utilization rates at key production facilities, and stronger demand for battery packs used in energy storage systems (ESS). While the company remains unprofitable on an operating basis, the trend in loss reduction suggests that strategic restructuring and capacity alignment are beginning to yield results. LGES also noted a 15% year-over-year increase in ESS sales volume, particularly in North America and Europe. The company’s partnership with major automakers continues to play a critical role. LGES supplies battery cells to Tesla (TSLA), General Motors (GM), and several European OEMs, with its share of GM’s U.S. EV battery supply rising to 38% in Q4. These contracts provide a stable revenue foundation even as end-market demand fluctuates. Market sentiment responded positively, with LGES shares rising 4.2% in early trading and the U.S.-listed ADR (LNVGY) gaining 3.6%. Investors are viewing the loss reduction as a leading indicator of eventual profitability, particularly if battery prices stabilize and demand for EVs rebounds in 2026.