LG Energy Solution said on Monday that it received 466 billion won in tax credit through the US Inflation Reduction Act (IRA) in the third quarter this year.
As the company’s operating profit in the quarter was 448.3 billion won, it means that the South Korean battery maker would have posted an operating loss if it weren't for the subsidies.
Despite this, LG Energy Solution said it recorded 6.87 trillion won in revenue and 448.3 billion won in operating profit in the July-September period, a drop of 16.4% and 38.7%, respectively, from a year ago.
Expands sales from its battery joint ventures in North America, increased shipment of cars from its European car maker customers, and solid earnings from its joint venture in Indonesia and increase in energy storage system (ESS) sales helped the company increase its revenue by 12% from the previous quarter, LG Energy Solution said.
Also on a quarter-to-quarter basis, increased factory operation rates from more shipment of electric vehicles and ESS and stability of metal prices improved the company’s operating margin rate as well, it said.
LG Energy Solution recently signed a 109GWh pouch battery supply deal with Ford and another 50.5GWh deal for cylindrical batteries with Mercedes-Benz.
The company said it will respond to the growth of the global EV market with cell to pack technology, lithium iron phosphate (LFP) battery, high-voltage mid-nickel batteries, 46 series cylindrical batteries, single crystal cathode, and silicon anode.
LG Energy Solution was also looking for a long-term supply deal for batteries in the North American ESS market, the company added.
It will also increase the energy density of its LFP ESS cell producted in China by 20% within 2025, it said.