South Korea’s LG Energy Solution (LGES) said its second-quarter operating profit more than doubled year-on-year, as some customers accelerated battery purchases in anticipation of potential U.S. tariffs on Chinese materials used in electric vehicle production.
The company, which supplies major automakers including Tesla, General Motors and Volkswagen, reported an operating profit of 492 billion won ($358.7 million) for the April–June period, compared to 195 billion won a year earlier. That result beat the 298 billion won average forecast compiled by LSEG SmartEstimate, which weights more accurate analysts more heavily.
“Customers front-loaded orders in the second quarter to mitigate the impact of expected policy changes in the U.S., including tariffs,” the company said in a statement.
Excluding a tax credit received under the U.S. Inflation Reduction Act (IRA), LGES said it would have posted an operating profit of just 1.4 billion won. The IRA provides incentives to battery manufacturers sourcing materials and producing components in North America.
Shares in LGES fell 1.9% following the earnings report, amid broader concerns about weakening EV demand and the looming expiration of U.S. subsidies.
Some of LGES’s key customers, including GM and Tesla, are reportedly bracing for further disruptions from additional U.S. tariffs and slowing growth in electric vehicle sales. The U.S. government is scheduled to phase out federal subsidies for EV purchases on September 30.