LG Energy Solution’s power grid energy storage system battery container products / Courtesy of LG Energy Solution
Major battery maker LG Energy Solution reported a sharp rebound in operating profit last year, driven largely by the expansion of its energy storage system (ESS) business in North America, as it accelerates preparations for growth in 2026.
The LG Group subsidiary said Thursday its operating profit jumped 134 percent year-on-year to 1.35 trillion won ($16.6 billion), despite a 7.6 percent decline in sales to 23.7 trillion won, as improved production efficiency and rising ESS demand offset a sluggish electric vehicle (EV) battery market.
LG Energy Solution Executive Vice President and Chief Financial Officer Lee Chang-sil attributed the earnings improvement to the company’s early start on ESS mass production in North America.
“By relocating our ESS production hub in the region from Arizona to Michigan, we were able to begin mass production earlier,” Lee said. “We also converted idle EV battery production lines in Poland and the United States to ESS manufacturing, significantly improving overall efficiency.”
Building on last year’s performance, the company said it will further strengthen its ESS business in 2026, citing what it described as “structural growth” in the global market. ESS installation volume this year is expected to rise by more than 40 percent, fueled by growing electricity consumption, increased cooling and heating demand linked to climate change, and a surge in data center construction driven by artificial intelligence.
Rising investments by global Big Tech firms in data centers, along with supportive government policies, are also expected to underpin demand, the company said.
“ESS demand in North America this year is projected to reach roughly the midpoint of the region’s EV battery market in volume,” a company official said.
LG Energy Solution said its accumulated ESS supply contracts reached 140 gigawatt-hours (GWh) as of last year. In 2026, the company aims to sign new ESS deals exceeding last year’s record of 90 GWh, while doubling ESS production capacity to 60 GWh by fully utilizing its manufacturing plants in Holland and Lansing, Michigan.
In the EV battery segment, LG Energy Solution forecast gradual growth of 10 to 20 percent in 2026, as it pivots toward more affordable products. The company plans to expand mass production of lithium iron phosphate and high-voltage mid-nickel batteries, while advancing next-generation technologies.
It will begin producing samples of prismatic lithium manganese-rich batteries at its Ochang plant in North Chungcheong Province during the first half of the year, with mass production scheduled for 2028. The company will also unveil fast-charging 46-series cylindrical batteries this year and start mass production at its new Arizona plant upon completion.
LG Energy Solution CEO Kim Dong-myung said the industry is undergoing a structural shift.
“The global battery market has entered a phase of value transformation, expanding its applications beyond EVs to ESS,” Kim said.
To strengthen its financial footing, the company said it will cut investment in new production facilities by more than 40 percent in 2026, instead focusing on maximizing existing assets and enhancing financial stability.
