LG Energy Solution Targets 90GWh of Battery Orders in US Energy Storage Market in 2026

Why It Matters

LG ES aims to lock in a dominant share of the fast‑growing U.S. storage market, offsetting soft EV demand and strengthening supply‑chain resilience under tighter import rules.

Key Takeaways

• LG ES aims 90 GWh US ESS orders by 2026
• ESS production to exceed 60 GWh, half US battery demand
• Capex cut 40% while repurposing existing factories
• US tax credits boost domestic BESS market growth
• Tesla plans $20 B capex, LG ES takes cautious route

Pulse Analysis

The United States is emerging as the world’s largest growth engine for stationary battery storage, with demand projected to rise more than 40 % in 2026. Federal investment‑tax‑credit (ITC) policies and new foreign‑entity‑of‑concern rules are steering utilities toward domestically produced cells, creating a fertile environment for manufacturers that can meet the "domestic‑content" threshold. LG Energy Solution’s 90 GWh order target reflects confidence that these incentives will sustain a structural upswing in grid‑stability, AI‑data‑center, and climate‑driven heating‑cooling applications.

LG ES is pursuing a lean capital‑allocation model, trimming 2026 capex by roughly 40 % and repurposing existing EV lines in Michigan, Poland and Korea for LFP ESS production. This approach lets the company scale to over 60 GWh of ESS cells without the financial risk of new greenfield projects, contrasting sharply with Tesla’s $20 billion capex‑heavy roadmap that emphasizes new LFP lines and AI ventures. By leveraging its early‑mover advantage in LFP chemistry and securing cathode supplies from Indonesia, LG ES can deliver cost‑competitive modules to utilities while preserving cash flow.

If LG ES captures the projected half of North American battery demand, the competitive landscape will tilt toward a few Korean players capable of delivering large‑scale, domestically sourced storage solutions. Such concentration could accelerate the on‑shoring of the BESS supply chain, reduce reliance on Chinese imports, and spur further policy support for local manufacturing. However, the race with Tesla and other entrants will hinge on the ability to balance rapid capacity expansion with disciplined spending, a dynamic that will shape the next phase of the U.S. energy‑storage market.

LG Energy Solution targets 90GWh of battery orders in US energy storage market in 2026

By Andy Colthorpe · February 4, 2026

LG Energy Solution exhibition stand at the 2024 edition of RE+. It and fellow South Korean companies Samsung SDI and SK On are among the earliest‑to‑market suppliers of domestic content in the US BESS market. Image: Andy Colthorpe / Solar Media

LG Energy Solution will keep global battery cell production at around 300 GWh in 2026, while increasing its proportion of supply for energy‑storage‑system (ESS) applications.

In the South Korean battery manufacturer’s Q4 2025 results release last week (29 January), LG Energy Solution (LG ES) leadership said the company would ramp up ESS cell production to “more than 60 GWh” by the end of 2026, with emphasis on the US.

LG ES also released its full‑year 2025 earnings and announced its key initiatives for 2026, including a planned year‑over‑year Capex reduction of around 40 %.

LG ES saw annual revenues decline amid a continued slowdown in US electric‑vehicle (EV) demand growth. While this was partially offset by stronger performance in the US stationary storage market due to the start of production at dedicated lines in Michigan, investments at the factory complex impacted Q4 profits.

The company reported KRW 23.7 trillion (US$ 16.3 billion) in consolidated revenue for 2025, a 7.6 % decline from KRW 25.6 trillion in 2024, which in turn was a 24 % drop from KRW 33.7 trillion in 2023.

Operating profit increased 133.9 %, from KRW 575.4 billion in 2024 to KRW 1.3 trillion, propelled in part by its first‑mover advantage as a major domestic supplier of lithium‑iron‑phosphate (LFP) cells to the US battery‑energy‑storage‑system (BESS) sector.

However, although it was able to avail of KRW 332.8 billion in production incentives in the US in Q4, investment in repurposing nickel‑manganese‑cobalt (NMC) EV cell production lines at its Holland, Michigan, factory contributed to a quarterly loss of KRW 122 billion and an operating‑profit margin declining quarter‑on‑quarter from 10.5 % in Q3 2025 to ‑2 %.

Meanwhile, the US government’s withdrawal of tax credits for electric vehicles from September 2025 meant that production incentives accrued declined 9 % quarter‑on‑quarter.

90 GWh target for 2026

“In 2025, the EV market was heavily impacted by the policy changes,” CFO Chang Sil Lee said in an earnings call.

“In 2026 we expect [EV] growth to continue at least around 10 %, although becoming more moderate than the past.”

In the ESS sector, the LG ES CFO said the company forecasts annual demand growth of more than 40 % this year, driven by “industrial electrification and growing cooling and heating demand due to climate change,” as well as increased power consumption and the growing deployment of renewable energy.

Chang Sil Lee added that rising power demand, the need for grid stability and AI and data‑centre developments “are all factors triggering structural growth of the ESS market.”

The CFO said LG ES expects the ESS market to comprise around half of all battery demand in North America, with investment‑tax‑credit (ITC) policies in the US a major factor in that growth.

The order backlog in the ESS segment stood at 140 GWh by the end of 2025, and LG ES targets adding a further 90 GWh in new ESS orders this year on top of turnkey project solutions, primarily from utilities and developers in North America.

On 3 February, the company’s US energy‑storage‑system integrator subsidiary LG ES Vertech and solar‑and‑storage technology provider Q‑cells’ project arm announced a 5 GWh US deal, with more to follow.

While LG ES claims it could capture half of the US BESS market’s demand in 2026, the company has also opened 5 GWh of ESS cell production at its site in Oh Chang, Korea, and has retooled some EV production capacity in Poland. It could repurpose more at its Polish site in a proactive response to demand, while lines in China could be used to support entry or market expansion in grid‑storage markets in Australia and Japan.

Under President Joe Biden’s administration, the US market is already shifting toward domestic content and on‑shoring of supply chains, reducing dependence on imported products—primarily from China—through higher Section 301 import tariffs, an approach industry veteran Andy Tang described in 2024 as a blend of “carrot and stick” policies.

The Republican‑led Congress under former President Donald Trump introduced new foreign‑entity‑of‑concern (FEOC) rules for production‑tax‑credit (PTC) and investment‑tax‑credit (ITC) incentives, which bar the use of Chinese products over a certain threshold of material assistance. The threshold is considered prohibitive for battery cells, which comprise a high proportion of BESS costs.

LG Energy Solution and fellow Korean manufacturers Samsung SDI and SK On all have existing investments in EV‑cell production in the US, giving them a competitive advantage in the domestic‑content market. Some industry experts forecast that these producers alone could potentially make enough cells to meet US demand fairly quickly, although there remains uncertainty over the fate of downstream US battery manufacturing for BESS applications.

LG ES Capex streamlining contrasts with Tesla’s 2026 plans

Analyst Charlotte Gisbourne (Solar Media Market Research) noted that cell manufacturing has become “a key talking point when it comes to the future of the energy‑storage market” in the US.

“Both companies are pushing to increase cell capacity in the US,” Gisbourne said, “although the companies are showing diverging plans moving forward.”

Tesla remains largely dependent on third‑party suppliers for its BESS cells and is at the early stages of ramping its first LFP lines in Nevada with 7 GWh annual output. LG ES has already opened its 17 GWh lines in Michigan and will also retool some of its EV lines built through joint ventures with Stellantis and Honda.

CFO Chang Sil Lee said the retooling strategy would enable LG ES to ramp without “incurring significant costs” in 2026.

ESS battery‑planning division representative Kim Min‑Su highlighted that the company’s upstream activities include securing greater quantities of cathode materials from Indonesian suppliers, with the Southeast‑Asian country recently emerging as a key player.

By contrast, Tesla announced that 2026 would be a Capex‑heavy year, with investments in the upstream battery space—LFP lines, cathode‑material production and a lithium refinery—alongside major investments in AI, humanoid robots and self‑driving cars and taxis.

“LG ES appears to be erring on the side of caution, aiming to minimise new investments and wants to reduce Capex by more than 40 % in 2026 while utilising some existing factories for ESS,” Gisbourne said.

“Tesla, on the other hand, is aiming to ramp up six new production lines and estimates a steep rise in Capex to over US$ 20 billion for 2026,” she added, noting that although the investments include increased production of the Megapack BESS solution, “the majority of the focus appears to be on AI and robotics.”

The Energy Storage Summit USA will be held 24‑25 March 2026 in Dallas, TX. It features keynote speeches and panel discussions on topics like FEOC challenges, power‑demand forecasting, and managing the BESS supply chain.

The headline and body text of this article have been amended from their original form to reflect LG ES company and executive statements more accurately.