LG Energy Solution (373220)
Factual Summary
LG Energy Solution recorded cumulative H1 2026 (semiannual report) revenue of KRW 14.1152 trillion, an operating loss of KRW 94.5 billion, and a net loss of KRW 1.2727 trillion (DART filing no. 20260813000255, as of 2026-06-30). For Q2 2026 alone, revenue was KRW 7.5602 trillion and operating profit was KRW 113.3 billion, returning to profit for the first time in three quarters; however, KRW 241.0 billion of this reflects the U.S. IRA Section 45X (AMPC) production tax credit, and excluding this amount the quarter's underlying operating loss was KRW 127.7 billion (2026-07-30 earnings release).
Context Note on Price Change
The Q2 2026 accounting return to profit reflects the U.S. IRA tax credit; excluding this effect, the core business remained in an operating loss throughout H1. Over the same period, the ESS segment's share of revenue expanded to the upper-20% range, and large supply contracts were signed with DTE Energy in the U.S. (KRW 2.4 trillion) and Hanwha Qcells, among others — a shift in revenue mix that partially offset slowing EV demand (Battery Inside, EToday, 2026-05 to 2026-07).
Business Segment Composition
In H1 2026, the ESS segment's share of total revenue expanded to the upper-20% range (roughly 4.6x growth year-on-year). Amid slowing EV demand, the EV battery business responded by expanding its share of mid-to-low-price products and 46-series cylindrical cells, while for small-format batteries (IT applications, etc.), the growing share of cylindrical cell sales was cited as one factor behind the Q2 return to profit (Battery Inside, Good Morning Economy, The Elec, as of 2026-07).
Exact segment-level revenue figures (in KRW) were not obtained (the original notes to the financial statements in the semiannual report were not reviewed).
Competitor Comparison — Global EV Battery Market Share
In Q2 2026, all three Korean makers (LG Energy Solution, Samsung SDI, SK On) posted operating profits. LG Energy Solution's operating profit was KRW 113.3 billion (including a KRW 241.0 billion IRA tax credit), Samsung SDI's was KRW 203.8 billion, and SK On's was KRW 821.8 billion (reportedly including roughly KRW 1 trillion in one-off compensation), while CATL maintained an overwhelming lead in absolute scale with Q2 revenue of approximately KRW 31.96 trillion (company disclosures, Alpha Economy, Herald Economy, Huffington Post Korea, 2026-07 to 2026-08).
Valuation (Factual Multiples)
Within the 52-week price range (KRW 290,500-527,000, per Daum Finance), the analysis-date closing price sits at approximately 33% of the way up from the low. EV/EBITDA could not be calculated because detailed figures for interest-bearing debt, cash and cash equivalents, and depreciation were not available in the confirmed data (not obtained).
Governance and Capital Structure
| Date | Event |
|---|---|
| 2020-12-01 | Spun off from LG Chem via physical division, 200,000,000 shares issued |
| 2022-01-22 | Capital increase (IPO secondary offering), 34,000,000 shares issued → total shares outstanding reaches 234,000,000 |
| 2025-05 | LG Chem issues exchangeable bonds (EB) convertible into LG Energy Solution shares (approx. KRW 1.4 trillion) |
| 2025-11-03 | LG Chem disposes of shares (off-exchange transaction) |
| 2025-11-07 | Exchangeable bond (EB) conversion rights exercised, LG Chem's stake fixed at 79.38% |
| H1 2026 | NextStar Energy (Canada) stake expanded from 51% to 100% |
There were no treasury share acquisitions, disposals, or period-end holdings (DART treasury share acquisition/disposal status, as of 2026-06-30). The National Pension Service's latest ownership stake since 2024-10-30 was not obtained, as no updated 5%-or-more ownership disclosure has been filed.
Macro Environment
| Factor | Value as of Analysis Date | Transmission Channel |
|---|---|---|
| U.S. IRA Section 45X (AMPC) production tax credit | Q2 2026 amount recognized: KRW 241.0 billion (Q1: KRW 189.8 billion) | New restrictions on Chinese-sourced material/component content take effect for sales from 2027-01-01 onward (OBBBA) |
| U.S. Section 30D EV purchase tax credit | Fully repealed as of 2025-09-30 | 2026 U.S. EV sales projected to fall approximately -19% to -27% year-on-year, exerting downward pressure on U.S.-bound volumes |
| European EV demand | 2026 sales projected +30% year-on-year (BloombergNEF) | Positive factor for the Wroclaw, Poland plant's utilization rate, partially offsetting slowing U.S. demand |
| Lithium carbonate price | $21.94/kg (2026-08-12, +2.45%) | Surged in Q1 then corrected, rebounded again in August — cost impact depends on the lag in price-linked contract terms |
| Nickel price | $16,810/ton (2026-08-14) | Declining on improved supply outlook — eases costs, but price-linked contracts could also reduce revenue |
| KRW/USD exchange rate | KRW 1,417-1,419 (2026-08-14) | Affects KRW-translated results of North American production subsidiaries; currently at a neutral level |
Key Risk Factors
U.S. IRA Section 45X eligibility requirements will tighten from 2027 for Chinese-sourced materials and components (OBBBA). The Section 30D EV purchase tax credit was fully repealed as of 2025-09-30.
As of 2022, the top five customers accounted for approximately 51% of revenue, with GM's joint venture (Ultium Cells) representing a large share. Ohio Plant 1 was idled for seven months starting January 2026 and resumed operations in August (electrive.com, 2026-08-13).
Following the Ohio restart, H2 2026 utilization is projected at approximately 60%, coinciding with the new Arizona 46-series plant coming online (Seoul Economic Daily, 2026-07-22).
In 2026, approximately 17,277 Chrysler Pacifica Hybrid vehicles were recalled due to a battery cell defect (Stellantis announcement, kpinews.kr, 2026).
The patent dispute with China's Sunwoda was resolved via a licensing agreement in June 2026. In July 2026, LG Energy Solution filed patent lawsuits against China's EVE Energy with the U.S. ITC and a Texas federal court (Electronic Times, 2026-07-23).
The cumulative H1 2026 operating loss of KRW 94.5 billion and net loss of KRW 1.2727 trillion mark the only loss-making period in five years of confirmed financial data.
Supply-Demand Trends
Web-sourced estimate · discrepancies exist between sourcesOn a cumulative basis for 2026-07-16 to 2026-08-14 (approximately 20 trading days) per web-sourced estimates (alphasquare; not cross-checked against official KRX data): institutional investors showed net inflows of 465,038 shares, foreign investors showed net outflows of 110,729 shares, and retail investors showed net outflows of 269,319 shares. However, cross-checking the same figures against another secondary source (ir.gsifn.io) found the direction of foreign fund flows reversed on several dates, limiting the reliability of this data.
Foreign ownership was recorded at approximately 5.49% as of 2026-08-13 (web-sourced estimate). Trading volume for 2026-08-14 uses the authoritative confirmed figure of 343,360 shares; a secondary source checked during research (approximately 243,460 shares) differs and is noted here for reference only.
Recent News Timeline
| Date | Details |
|---|---|
| 2026-08-14 | LG Group and NVIDIA sign MOU for AI business cooperation; battery/ESS supply for data center power infrastructure cited as a key axis (Newspim) |
| 2026-08-14 | H1 2026 confirmed earnings released: cumulative revenue KRW 14.1152 trillion, cumulative operating loss KRW 94.5 billion, net loss KRW 1.2727 trillion |
| 2026-07-30 | Q2 earnings released: revenue KRW 7.5602 trillion, operating profit KRW 113.3 billion, returning to profit for the first time in three quarters (includes KRW 241.0 billion IRA tax credit) |
| 2026-07-08 | GM joint venture Ultium Cells' Tennessee plant begins production of LFP batteries for ESS — expanding North American ESS production footprint |
| 2026-05-28 | Signs supply agreement with U.S.-based DTE Energy for 6GWh of ESS batteries, worth $1.6 billion (approx. KRW 2.4 trillion) |
| 2026-05-26 | Sale-and-leaseback of buildings and related assets at Honda joint venture L-H Battery Company (Ohio), securing approximately KRW 3.7 trillion in liquidity |
| 2026-04-30 | Q1 earnings released: revenue KRW 6.5550 trillion, operating loss KRW 207.8 billion |
| 2026-02-04 | Signs supply agreement with Hanwha Qcells for 5GWh of LFP batteries for ESS |
Theme Exposure
Fact Highlights
Generated by FomoLog Agent · Data sources: Korea Exchange (KRX), NASDAQ, DART, SEC EDGAR
This is not investment advice. FomoLog provides factual summaries and post-hoc price-change context only. Investment decisions and their outcomes are solely the responsibility of the investor.