October 8, 2026 - Pivot to Storage Helps LG Energy Solution

This is the Telemetry Transportation Daily for October 8, 2026, and I'm Sam Abuelsamid, Vice President of Market Research for Telemetry. 

Besides the Panasonic/Tesla partnership, LG Energy Solution has been one of the clear leaders in producing lithium-ion batteries for vehicle electrification in the U.S. Their plant in Holland, Michigan, was one of the first to produce these batteries here, and joint ventures with GM, Honda, and Stellantis had the company well positioned to be a major force in the industry. But with EVs not taking off in the U.S. the way some had projected, LG faced a challenge with having too much cell production capacity. Thus, LG was one of the first cell suppliers to make a major pivot and start shifting U.S. production away from high-nickel cells for EVs to lithium iron phosphate cells for energy storage systems. 

This is now paying off for LG as it has reported record earnings for the third quarter driven by both the energy storage business and strong EV sales growth in Europe. Quarterly revenue jumped 59% to $7.2 billion while profit jumped 25% to $565 million. Growth in Europe is coming from strong demand for new Renault and Volkswagen Group EVs, while the rapid build-out of AI data centers is the key in North America. LG is getting LFP cells for ESS from its plants in Holland and Lansing, Michigan, as well as the Ultium Cells joint venture with GM in Spring Hill, Tennessee, and the Honda joint venture in Ohio.

Data centers require enormous amounts of power ranging from tens to thousands of megawatts, which is triggering a lot of pushback from residents in areas where companies are trying to build them. But they also require reliable power, which is driving demand for backup battery systems. In addition to LG, Ford is currently converting a plant that had been producing EV batteries in Kentucky, and SK On is converting a plant in Tennessee. While it's unclear how long the AI bubble will last, at least it's enabling battery manufacturers to get a return on their billions of dollars invested in battery production until EV sales start to eventually pick up. 

Thanks for listening.