Soaring BESS sales narrow losses at Samsung, LG Energy Solution

South Korea’s leading battery manufacturers LG Energy Solution (LGES) and Samsung SDI both reported narrower operating losses in the fourth quarter of 2025, as robust demand for battery energy storage system (BESS) helped offset continued weakness in electric vehicle sales.

LG Energy Solution posted an operating loss of KRW 122 billion ($85.5 million) for the October–December period, in line with guidance and down sharply from a KRW 226 billion loss a year earlier. Quarterly revenue rose 7.7% quarter-on-quarter to KRW 6.1 trillion, supported by strong BESS sales, particularly in North America. The company said the loss would have widened to KRW 455 billion without tax credits received under the US Inflation Reduction Act.

For full-year 2025, LGES reported KRW 23.7 trillion in revenue, down 7.6% year on year, while operating profit more than doubled to KRW 1.3 trillion, aided by BESS growth, improved cost efficiency, and North American production incentives.

“Last year, we saw a solid growth in ESS sales as we proactively expanded our LFP production capacity in North America, but total revenue decreased due to the slowdown in major customers’ EV sales,” said Chang Sil Lee, CFO of LG Energy Solution.

The manufacturer also said it successfully optimized its asset management in 2025 by reallocating capacity between EV and ESS production to limit new investments and improve idle-line utilization, establishing production sites early for mid- to low-end solutions such as high-voltage mid-nickel and LFP batteries in Europe, and enhancing capital efficiency through the sale of non-core assets, including a building from its North American joint venture facility.

For its energy storage products, LGES began local production of LFP batteries in North America in 2025 and plans to expand form factors from pouch-type to prismatic batteries. The company also strengthened its production competitiveness through system integration (SI) capabilities, resulting in a 140 GWh ESS order backlog.

Looking ahead, LGES expects global ESS installations to grow more than 40% in 2026, with North America accounting for roughly half of total battery demand. The company aims to secure more than 90 GWh in new ESS orders this year, primarily through large-scale, long-term contracts with key utilities and developers in North America.

To meet this demand, LGES plans to increase global ESS production capacity to over 60 GWh, with more than 80% located in North America. The expansion will involve scaling up standalone facilities in Holland and Lansing, Michigan, while temporarily utilizing certain production lines from joint ventures with Stellantis and Honda for additional ESS output.

Meanwhile, Samsung SDI reported improved quarterly performance, with Q4 sales of KRW 3.86 trillion and an operating loss of KRW 299.2 billion, roughly half the loss recorded in the previous quarter. Battery energy storage products delivered record quarterly sales, helping to significantly narrow losses despite subdued EV demand.

The battery division accounted for KRW 3.622 trillion in sales, up 28.4% quarter-on-quarter and 1.6% year-on-year, with an operating loss of KRW 338.5 billion.

On a full-year basis, Samsung SDI posted KRW 13.27 trillion in revenue, down 19.8% year-on-year, and an operating loss of KRW 1.72 trillion, with the widening annual loss reflecting ongoing challenges in EV demand.

Capitalizing on its position as the only non-Chinese prismatic battery cell supplier in the US, Samsung SDI strengthened its ESS portfolio by offering ternary cathode (NCA)-based SBB 1.7 and lithium iron phosphate (LFP)-based SBB 2.0 products, while expanding local production and supply capacity for BESS in North America.

Looking ahead, Samsung SDI expects continued ESS demand growth in 2026, driven by grid-scale storage, data center expansion, and U.S. policy support. The company plans to maximize profitability by operating its ESS production at full capacity, including mass production of SBB 2.0 LFP batteries in the US.