[Edaily Reporter JAEMIN SONG ] South Korea’s three major battery manufacturers have all posted profits for the first time in seven quarters, driven by energy storage systems (ESS). Their strategy of repurposing production lines—which had been underutilized due to slowing demand for electric vehicles—for ESS production, while also capturing demand from artificial intelligence (AI) data centers and power grids, has led to a rebound in earnings. The business structure of the domestic battery industry, which had been heavily skewed toward electric vehicles, is also rapidly shifting to focus on ESS.

According to industry sources on the 30th, LG Energy Solution posted revenue of 7.5602 trillion won and operating profit of 113.3 billion won for the second quarter of this year. SAMSUNG SDI CO.,LTD. posted revenue of 3.7688 trillion won and an operating profit of 203.8 billion won, while SK On reported revenue of 2.9460 trillion won and an operating profit of 821.8 billion won. This marks the first time since the third quarter of 2024 that all three battery companies have simultaneously posted quarterly profits.

LG Energy Solution returned to profitability after three quarters, while SAMSUNG SDI CO.,LTD. and SK On emerged from their loss streaks after seven quarters each. In particular, SAMSUNG SDI CO.,LTD. defied market expectations of a loss by posting an operating profit exceeding 200 billion won, demonstrating a faster-than-expected recovery. SK On also recorded its highest operating profit since its spin-off, despite one-time factors such as customer compensation.

ESS was the key driver behind the rebound for all three companies. As factory utilization rates fell due to the electric vehicle (EV) “chasm,” they converted existing production facilities for ESS use to reduce fixed-cost burdens. Furthermore, surging demand for ESS in North America—driven by the expansion of AI data centers and increased renewable energy generation—quickly filled the gap created by the slowdown in EV sales.

LG Energy Solution was the first to see results. In the first half of this year, ESS revenue increased 4.6 times compared to the same period last year, and its share of total company revenue rose to the high 20s percent. The company also secured more than 3 trillion won in new ESS orders in the first half alone, including AI data center projects where hyperscalers are the end customers. Driven by expanded ESS shipments, utilization rates at its North American plants rose, reducing the company’s overall fixed-cost burden.

SAMSUNG SDI CO.,LTD. offset sluggish demand for electric vehicles by increasing sales of high-power products for AI data centers—including not only ESS but also uninterruptible power supplies (UPS) and battery backup units (BBU). ESS orders in the U.S. have grown to the point where they will fill a significant portion of the company’s production capacity through 2029. Taking into account expected orders for the second half of the year, the company anticipates that demand will exceed production capacity starting in 2028 and is therefore considering additional capacity expansions.

SK On is also cultivating ESS as a new revenue stream alongside expanding sales of EV batteries. Following the restructuring of its U.S. joint venture with Ford to transition the Tennessee plant to a standalone operation, the company is expanding ESS orders, focusing on AI hyperscalers and power utilities. The plan is to expand its business scope to North America, building on its experience securing orders in South Korea’s centralized ESS contract market.

However, while SAMSUNG SDI CO.,LTD. posted a profit even excluding the U.S. Advanced Manufacturing Production Tax Credit (AMPC), LG Energy Solution remains in the red when this credit is excluded. SK On’s earnings also included a significant portion of one-time gains, such as customer compensation payments. Whether the expansion of ESS production and increased factory utilization rates will translate into stable profitability is expected to determine the second-half performance of the three battery companies.

An official in the battery industry stated, “While it is too early to say that demand for electric vehicles has fully recovered, the faster-than-expected growth of ESS has opened up a new market that leverages existing production facilities,” adding, “We expect the trend of improving performance to continue in the second half as utilization rates at North American production lines rise and ESS order volumes are reflected in revenue.”