--- title: "LG Energy expects its operating profit in the second quarter to decline by 77% due to weak demand for electric vehicles" type: "News" locale: "en" url: "https://longbridge.com/en/news/291856755.md" description: "LG Energy Solution expects its operating profit in the second quarter to decline significantly by 77% to 113 billion KRW due to weak demand for electric vehicles. Although revenue is expected to grow by 24.8%, sales have been dragged down by General Motors' delay of its electric truck project. The company has avoided losses through U.S. tax credits and is trying to alleviate market pressure by expanding its energy storage system business driven by AI data centers, but this sector is not yet large enough to fully offset the impact of declining EV demand" datetime: "2026-07-07T00:39:22.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/291856755.md) - [en](https://longbridge.com/en/news/291856755.md) - [zh-HK](https://longbridge.com/zh-HK/news/291856755.md) --- # LG Energy expects its operating profit in the second quarter to decline by 77% due to weak demand for electric vehicles South Korean battery manufacturer LG Energy Solution (LGES) announced on Tuesday that it expects its operating profit for the April to June period to decline by 77% to 113 billion won (73.91 million USD), due to weak demand for electric vehicles (EVs) continuing to drag down battery sales. In contrast, the profit forecast from LSEG SmartEstimate is 249 billion won, which primarily references the views of analysts with higher and more stable accuracy rates. Specific details are as follows: LGES (whose clients include Tesla, General Motors, and Hyundai) has been facing a long-term dilemma of weak demand for electric vehicles. Reports indicate that one of its major clients, General Motors, is indefinitely delaying its next-generation full-size electric truck project. In May, Reuters reported that LGES's battery joint venture Ultium Cells, established with General Motors in Ohio, is delaying the return of hundreds of employees due to the continued weakness in electric vehicle demand. According to documents submitted by LGES to regulators, its revenue is expected to grow by 24.8% year-on-year, reaching 7.6 trillion won. LGES stated that the quarterly profit guidance includes tax credits provided for the company's battery production in the U.S. under the Inflation Reduction Act. Without these tax credits, the company would have recorded an operating loss of 128 billion won. To alleviate the weakness in the electric vehicle market, LGES has been expanding its energy storage system (ESS) business, which is supported by the growing electricity demand from artificial intelligence data centers. Analysts indicate that the demand for ESS driven by AI-powered data centers is gradually becoming a structural growth driver for battery manufacturers, with profit margins potentially higher than those for electric vehicle batteries. However, they also caution that the current scale of ESS demand is still too small to fully offset the impact of weak electric vehicle battery demand in the short to medium term. In May, LGES signed a contract worth 2 trillion won to supply 6 gigawatt-hours (GWh) of ESS batteries to Michigan-based utility company DTE Energy over approximately two years. DTE Energy plans to use these batteries for eight major grid projects, including an AI data center project for Oracle. LGES plans to announce detailed performance results on July 30 ### Related Stocks - [GM.US](https://longbridge.com/en/quote/GM.US.md) - [03121.HK](https://longbridge.com/en/quote/03121.HK.md) - [TSLA.US](https://longbridge.com/en/quote/TSLA.US.md) - [DTE.US](https://longbridge.com/en/quote/DTE.US.md) - [ORCL.US](https://longbridge.com/en/quote/ORCL.US.md) - [DTW.US](https://longbridge.com/en/quote/DTW.US.md) - [DTB.US](https://longbridge.com/en/quote/DTB.US.md) - [DTG.US](https://longbridge.com/en/quote/DTG.US.md) - [ORCL-D.US](https://longbridge.com/en/quote/ORCL-D.US.md) ## Related News & Research - [LG Energy Solution forecasts 77% operating profit fall in Q2 on weak EV demand](https://longbridge.com/en/news/291854996.md) - [Thailand secures $4.1B in EV supply chain investment, featuring investments from China, Korea, Japan](https://longbridge.com/en/news/291759231.md) - [‘World’s largest’ second-life EV battery factory opens in just six weeks](https://longbridge.com/en/news/291588235.md) - [Hyundai Motor America Reports Record June, Q2 and First-Half 2026 Total Sales](https://longbridge.com/en/news/291419228.md) - [Is this forgotten battery stock primed to deliver gains in the next leg of the EV revolution?](https://longbridge.com/en/news/291324254.md)