LG Energy Solution reported a mixed financial performance for the first quarter of 2026, posting higher revenue but slipping into an operating loss as it continues to invest in expansion and new technologies.
The company recorded consolidated revenue of KRW 6.6 trillion, marking a modest 1.2% increase quarter-on-quarter. However, it reported an operating loss of KRW 207.8 billion, reflecting rising costs linked to scaling up production and shifts in product demand.
The revenue growth was driven by stable global demand and strong orders for cylindrical electric vehicle (EV) batteries and energy storage system (ESS) batteries. Notably, ESS now contributes a mid-20% share of total revenue, highlighting its growing importance in the company’s portfolio.
During the quarter, shipments of pouch-type EV batteries declined due to inventory adjustments by a key North American customer. This shift, combined with initial ramp-up costs for new ESS production facilities, weighed on profitability despite improved shipments of cylindrical batteries.
A major highlight for the company was securing over 100GWh in new orders for its 46-Series cylindrical EV batteries, bringing its total order backlog to more than 440GWh as of April. The company has begun producing 4695 battery cells at its Ochang facility and plans to expand production of various 46-Series formats at its Arizona plant later this year.
In parallel, LG Energy Solution strengthened its presence in North America by building a comprehensive ESS production network. This includes standalone facilities in Michigan and Canada, along with joint ventures such as Ultium Cells in Tennessee and L-H Battery Company in Ohio. The company aims to achieve over 50GWh of ESS production capacity in the region by the end of 2026.
The company also secured a new supply contract for a grid-scale ESS project in North America, with deliveries of next-generation batteries—offering a 15% cost reduction—set to begin in 2028.
Looking ahead, LG Energy Solution identified rising global electricity demand and grid stability concerns as key drivers for ESS growth. At the same time, tightening regulations in the U.S. and Europe are increasing the importance of localized battery production, positioning the company to benefit from its regional manufacturing footprint.
To navigate current challenges, the company outlined four strategic priorities: strengthening cash flow, responding more effectively to customer demand, stabilizing supply chains, and enhancing product competitiveness through next-generation technologies such as all-solid-state and sodium-ion batteries.
Despite the quarterly loss, the company’s expanding order book, growing ESS segment, and strong positioning in North America signal long-term growth potential amid the global transition to electrification and renewable energy.
