LG Electronics formalizes Nvidia tie-up, targets autonomous driving in vehicle tech push

LG Electronics' vehicle components business has emerged as a new cash generator for the company, which is now signaling further growth through a deepening technology partnership with Nvidia.

According to LG Electronics' semiannual report released Friday, the Vehicle Component Solutions, or VS, division — which oversees the company's automotive electronics business — said it is "conducting technology reviews and building a development environment for next-generation high-performance computing platforms with Nvidia to develop an AIDV (AI-defined vehicle) platform."

It is the first time LG Electronics has directly referenced its automotive partnership with Nvidia in a regulatory filing. The company has been rapidly expanding its ties with the chipmaker across multiple business units — from robotics and AI data center cooling systems to automotive software.

The breadth of the relationship was on display last week when LG Group Chairman Koo Kwang-mo met Nvidia CEO Jensen Huang at Nvidia's headquarters in Santa Clara, California. Accompanying Koo were Eun Seok-hyun, president of the VS division, and Lee Jae-sung, president of the ES division overseeing heating, ventilation and air conditioning, underscoring the wide-ranging nature of the two companies' cooperation.

LG Electronics' vehicle business has grown primarily around in-vehicle infotainment products — including telematics units, display audio systems and navigation devices. The division posted quarterly sales exceeding 3 trillion won ($2.14 billion) in both the first and second quarters of this year, reflecting steady growth momentum.

Rising shipment volumes to global automakers pushed the division's average factory utilization rate to 97.9% in the first half of this year, effectively keeping production at full capacity.

Building on its Nvidia partnership, LG Electronics aims to expand its vehicle business beyond its infotainment roots into autonomous driving. The company plans to use the collaboration to position itself in the emerging AIDV segment, which it sees as a new paradigm for the automotive market.

An AIDV is a next-generation intelligent vehicle in which AI autonomously manages and optimizes all aspects of operation — from core functions and performance to the user experience. The concept represents an evolution beyond the software-defined vehicle, or SDV, which centers on software as the primary framework for defining a car.

LG Electronics plans to combine its infotainment products and automotive software capabilities with Nvidia's Drive Hyperion vehicle computing platform to develop a high-performance computing platform targeting next-generation AIDVs.

Nvidia's Drive Hyperion is designed to support Level 4 autonomous driving, in which a vehicle operates without driver intervention. The platform integrates two Drive AGX Thor system-on-chip units based on Nvidia's latest Blackwell AI chip architecture.

LG Electronics, which has long defined the vehicle as a "living space on wheels" and built a portfolio of in-car services around that vision, now plans to work with Nvidia to develop next-generation automotive solutions encompassing autonomous driving functions and AI services. The company believes supplying such solutions to global original equipment manufacturers will open new avenues for growth.

The electric vehicle powertrain business, another pillar of LG Electronics' vehicle operations, is also gaining momentum. LG Magna e-Powertrain, a joint venture established in 2021, posted sales of 379.2 billion won in the first half of this year — a 112 percent increase from 178.5 billion won in the same period last year. Over the same period, the venture swung to a net profit of 16.2 billion won from a net loss of 10.9 billion won.

Growth is accelerating particularly through order wins in Europe and Asia. During its second-quarter earnings call, LG Electronics said it had secured multiple EV powertrain projects from major automakers in Europe and Asia in the first half of this year. The company added that it plans to use a factory in Hungary — targeted for mass production in January next year — as a production hub in Eastern Europe, running new order wins in parallel to secure high utilization rates from the outset.

The VS division, launched in 2013, ran losses for years before posting its first annual profit in 2022. A decade after its founding, in 2023, it surpassed 10 trillion won in annual sales and grew into a core business alongside LG Electronics' home appliance unit.

Profitability has also improved markedly. The division's operating profit margin hovered in the 1 to 2 percent range from 2022 to 2024 before rising to 5 percent in 2025. iM Securities forecasts the margin will exceed 7 percent for the first time this year and climb into the 8 percent range next year.

"Vehicle infotainment is delivering strong profitability, and that is being reinforced by improvements in the EV powertrain business and at ZKW" — the Austrian automotive lighting company LG Electronics acquired in 2018 — said Ko Eui-young, an analyst at iM Securities.