LG Energy Solution reported second-quarter earnings that fell short of analyst expectations, posting operating profit of 113.3 billion won ($74 million) against estimates of 210.7 billion won. The battery maker attributed the miss to lackluster electric vehicle demand in key markets, particularly the United States, despite strong growth in energy storage systems.

The results underscore a challenge facing the global EV industry. While battery demand for grid storage and renewable energy integration remains robust, consumer appetite for electric vehicles has cooled from earlier expectations. LG Energy Solution, a key supplier to major automakers, felt the impact directly through reduced battery orders from automotive customers.

Storage Systems Outperform Automotive

LG Energy Solution’s energy storage division performed well, driven by renewable energy adoption and grid modernization projects worldwide. Stationary battery demand continued growing as utilities and industrial customers invest in backup power and load-balancing systems. This bright spot partially offset weakness in automotive battery revenue.

Market Outlook Uncertain

The company’s guidance for coming quarters remains cautious. Automakers are adjusting production schedules based on softer EV sales, particularly in the US market where consumer subsidies and charging infrastructure investments have not yet translated into expected vehicle demand. LG Energy Solution faces a near-term headwind as customers defer battery orders.

The earnings miss reflects broader challenges in the EV market as growth rates moderate from earlier hyperbolic expectations.