Three domestic battery companies posted profits side by side in the same quarter.
For the first time in seven quarters.
But the securities industry is also calling it an “optical illusion.” Why?
3-line summary
1. The three battery makers’ return to profit differs in substance from company to company.
2. Excluding subsidies, LG Energy Solution posted a 1,277억 won loss.
3. What drove the recovery was ESS, not electric vehicles.
All three posted profits
These are their results for the second quarter of 2026.
| Company | Revenue | Operating profit |
|---|---|---|
| LG Energy Solution | 7조 5,602억 won | 1,133억 won |
| Samsung SDI | 3조 7,688억 won | 2,038억 won |
| SK On | 2조 9,460억 won | 8,218억 won |
It was the first time all three posted profits together since the third quarter of 2024. Over the seven quarters in between, at least one had always been in the red.
The picture changes when subsidies are removed
There is one thing to know here. The United States reduces taxes based on the amount produced when batteries are made domestically. This is a program attached to the Inflation Reduction Act, known in the industry by its English abbreviation, AMPC.
This money is included directly in operating profit. Excluding it, the picture looks like this.
| Company | Tax credit received | Operating profit/loss excluding it |
|---|---|---|
| LG Energy Solution | 2,410억 won | 1,277억 won loss |
| Samsung SDI | 1,077억 won | 961억 won profit |
These figures were compiled by NewsSpace. LG Energy Solution’s 1,133억 won profit was a figure created by receiving money from the U.S. government. It was not profit left over from selling batteries.
Samsung SDI remained profitable even after the credit was removed. Even though both are described as a “return to profit,” the substance differs between the two companies.
SK On’s 8,218억 won is another story
Revenue of 2조 9,460억 won and operating profit of 8,218억 won. Even at a glance, the ratio looks unusual.
According to a Huffington Post Korea report, Hana Securities analyst Yoon Jae-sung believes approximately 1조 1,000억 won in one-time gains, including tariff refunds and customer compensation, were reflected in the result. That means money that will not come in again.
The company also cited “one-time factors such as customer compensation” as a reason for its return to profit. It was its largest quarterly performance since the spin-off, but it would be difficult to apply this number directly to the next quarter.
What did “chasm” mean?
There is a term that has continued to appear in battery articles over the past 2 years: chasm.
It refers to a period when demand temporarily cools after a new product moves beyond early enthusiasts but before it reaches the mass market. Electric vehicles were caught right there. Those who wanted to buy had already done so, while the next buyers delayed as they weighed charging stations and prices.
Battery companies depended on electric vehicles selling. So they slumped together.
The relief pitcher was not electric vehicles
What drove this rebound was ESS. Think of it as a large battery warehouse that stores electricity and takes it out when needed.
Where the demand came from is the key: AI data centers.
Data centers consume enormous amounts of electricity, but building new power plants takes years. That made it urgent to have equipment that can take in electricity when prices are low and use it when needed. Batteries happen to fill the inside of that equipment.
They did not recover because the electric vehicle market recovered; new customers appeared in an entirely different place. This is, in my view, the most notable point in these results.
What to watch in the second half
The plans announced by all three companies point in the same direction.
- LG Energy Solution — Expand North American ESS production capacity
- Samsung SDI — Pursue mass production of prismatic LFP batteries in the United States
- SK On — Review converting some electric-vehicle battery lines in North America and Seosan to ESS lines
Here, LFP refers to batteries made with lithium, phosphate, and iron. They are inexpensive and last a long time, but store less energy at the same weight. That is a disadvantage for vehicles and an advantage for ESS, which remains fixed in one place.
None of the three said they would expand electric-vehicle lines. That is the picture the industry sees now.
There is one line to watch next quarter
The fact that all three companies posted profits together does not change. But whether those profits came from sales, subsidies, or a one-time settlement differs by company.
There is one thing to watch when reviewing next quarter’s results: Do they still have profit left after excluding tax credits?
Sources
- NewsSpace K-Battery TOP3 Post Joint Profit for First Time in 7 Quarters… ESS and AI Data Centers Erase the “Chasm”
- Global Economic Three Battery Makers Return to Profit in the Second Quarter… ESS Demand Drives Results
- Huffington Post Korea SK On’s Second-Quarter Operating Profit Was 8218억, but It Was Thanks to 1조 in “One-Time Compensation”
- Good Morning Economy K-Battery Keeps the Spark Alive With ESS and AMPC; What Is Its Counterattack Card for the Second Half?
- Cox News All Three Battery Makers Profitable? As It Turns Out, It Was an “Optical Illusion”
SK On did not separately disclose its tax credits and tariff refunds, so no amounts were provided by item.
This article is for informational purposes, summarizing disclosed and reported earnings, and is not investment advice. Decisions to trade specific stocks are the reader’s own responsibility; consult a financial investment professional if necessary.