[E-Daily Reporter SOYEON KIM ] Signs of a turnaround for Korean battery companies are becoming increasingly clear in the second half of the year. Having passed through the “EV chasm” (a temporary slowdown in demand), these companies are expected to return to profitability in the second half as earnings from energy storage systems (ESS), particularly in the North American market, are fully reflected in their financial results.

According to industry sources on the 10th, LG Energy Solution will announce its second-quarter earnings and hold a conference call on the 30th. On the 7th, the company announced that its second-quarter consolidated operating profit was tentatively estimated at 113.3 billion won. This marks a return to profitability after two consecutive quarters of losses—the fourth quarter of last year (an operating loss of 120 billion won) and the first quarter of this year (an operating loss of 207.8 billion won).

The increase in ESS volume, driven by expanded production capacity—particularly in the North American market—is cited as the main factor. Operating profit turned positive as the burden of initial expansion costs for ESS decreased and shipments of cylindrical EV batteries and mid-to-low-end pouch-type batteries for the European market increased.

In particular, LG Energy Solution has begun mass production of ESS batteries at four of the five ESS production hubs it has established in North America. LG Energy Solution has begun mass production of ESS batteries at four sites in North America: the Holland plant in Michigan; the NextStar Energy Windsor plant in Ontario, Canada; the Honda joint venture plant in Fayette County, Ohio; and the GM joint venture plant in Spring Hill, Tennessee.

ESS orders in North America are expanding to include AI data centers and large-scale power grid projects. The company’s target ESS production capacity in North America by the end of this year is 50 GWh (gigawatt-hours). However, analysts note that challenges such as initial ramp-up costs and bottlenecks in pack assembly still need to be addressed. Hwang Seong-hyun, an analyst at EUGENE INVESTMENT & SECURITIES, said, “We expect the full-scale profitability turnaround for ESS to occur in the fourth quarter of this year.”

SAMSUNG SDI CO.,LTD. and SK On are also expected to see improved performance in the second half of the year. According to financial information provider FnGuide Inc., the consensus estimate (average of securities firms’ forecasts) for SAMSUNG SDI CO.,LTD.’s second-quarter revenue this year is 3.6686 trillion won, with an operating loss of 52.3 billion won. SAMSUNG SDI CO.,LTD. is expected to reduce the scale of its operating loss compared to both the same period last year and the previous quarter. SAMSUNG SDI CO.,LTD. has been posting operating losses since the fourth quarter of 2024.

In the ESS sector, SAMSUNG SDI CO.,LTD. is seeing increased shipments of domestically produced uninterruptible power supplies (UPS) for data centers, in addition to those for the North American power grid. In the small-cell battery segment, strong sales of battery backup units (BBUs) for data centers are also helping to narrow the operating loss. Jang Jeong-hoon, an analyst at SamsungSecurities, said, “Due to growth in data center BBUs and ESS, as well as increased demand for EV batteries in Europe, the timeline for returning to profitability is expected to be brought forward from the fourth quarter to the third quarter of this year.”

SK On is also expected to slightly reduce its operating loss for the second quarter. This is partly due to the recovery in global EV demand accelerating faster than expected, driven by persistently high oil prices in the wake of the U.S.-Iran conflict. Analysts note that earnings are improving as the EV market gains momentum in Europe. The European EV market posted double-digit year-over-year growth from March to May of this year. It is anticipated that SK On’s earnings will continue to improve if the company expands its orders for ESS batteries and diversifies the utilization of its North American plants.