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LG Sees Q2 Profit Jump as U.S. Tariffs Rise and EV Subsidies End

Both companies are reconfiguring North American operations as they boost energy storage output to navigate policy shifts.

Battery cells with the logo of LG Energy Solution are displayed at the company headquarters in Seoul, South Korea, April 23, 2024. REUTERS/Kim Hong-Ji/File Photo
Image
This undated file photo shows LG Electronics Inc.'s headquarters in Seoul. (Yonhap)
This photo, provided by LG Energy Solution Co., shows a company production plant. (PHOTO NOT FOR SALE) (Yonhap)

Overview

  • LG Energy Solution posted a Q2 operating profit of 492.2 billion won and net profit of 90.6 billion won after a prior-year loss, driven by robust U.S. demand and Inflation Reduction Act credits.
  • CFO Lee Chang-sil cautioned that looming U.S. battery import tariffs and the scheduled September end of federal EV tax credits could slow North American EV growth by early next year.
  • LG Energy Solution plans to repurpose U.S. EV battery lines for energy storage systems, ramp up LFP battery output at its Michigan plant and defer some investment to improve second-half margins.
  • LG Electronics recorded a 3.1 percent Q2 net profit decline to 609.7 billion won and a 46.6 percent drop in operating profit on rising logistics and tariff costs.
  • LG Electronics will shift washing machine production to Mexico in September to secure incentives and avoid duties, leveraging record B2B sales in vehicle components and HVAC.