Samsung SDI, a major Korean battery manufacturer, said Thursday it swung to a profit in the second quarter from a year earlier, driven by higher battery sales and a U.S. tax credit.

In the three months that ended in June, the company posted a net profit of 471.6 billion won ($327 million), shifting from a net loss of 166.7 billion won in the same period last year, it said in a regulatory filing.

The company attributed the turnaround to increased shipments of electric vehicle (EV) batteries to Europe and stronger demand for high-voltage batteries used in power tools, uninterruptible power supply (UPS) systems and battery backup units (BBUs).

The company also said a sizeable tax credit under the Advanced Manufacturing Production Credit (AMPC) program of the U.S. Inflation Reduction Act helped boost quarterly earnings.

Samsung SDI also swung to an operating profit of 203.8 billion won in the second quarter from an operating loss of 397.8 billion won a year earlier.

Sales rose 18.5 percent to 3.76 trillion won from 3.18 trillion won during the cited period.

For the first six months of the year, the company posted a net profit of 527.7 billion won, compared with a net loss of 382.7 billion won in the same period in 2025.

Long-term contracts to supply energy storage systems (ESSs) to U.S. customers and stronger demand for UPS systems and BBUs supported the first-half earnings, the company said.

Samsung SDI expects its earnings recovery to continue in the second half.

For its ESS business, the company said it will continue strengthening its local supply chain in the U.S. while preparing for mass production of prismatic lithium iron phosphate (LFP) batteries. Demand for utility-scale ESS and UPS systems is expected to grow rapidly, driven by investment in artificial intelligence (AI) data centers.

For EV batteries, Samsung SDI plans to expand supplies for mass-market models in Europe while pursuing a broader range of new business opportunities, including LFP battery projects.

Samsung SDI began operations at its StarPlus Energy battery plant in Indiana in late 2024 and is currently building two more plants in the U.S. state — one with Stellantis N.V. and another with General Motors.

The Indiana plant is operated by StarPlus Energy, a 51:49 joint venture between Samsung SDI and Stellantis.

In addition to its U.S. joint ventures, Samsung SDI operates two battery cell plants in Korea and four overseas plants in China, Hungary and Malaysia.