LG Energy Solution chief urges cost cuts, AI push in 2026

LG Energy Solution CEO Kim Dong-myung has asked employees to focus on cost reduction and improving product competitiveness with AI in 2026.

The executive said in a New Year’s message that integrating AI into product development, material development, and manufacturing operations is essential for the company’s future.

Kim said the company aims to enhance productivity by at least 30% by 2030 through these efforts.

He also noted significant progress in securing energy storage system and EV projects, and called on employees to turn these deals into tangible results.

Kim said the company will work to speed up the energy storage system transition in North America, Europe, and China, focusing on timely delivery, supply stability, and operational efficiency.

🔗 Source: Yonhap

🧠 Food for thought

Implications, context, and why it matters.

The 30% productivity goal lacks baseline metrics to assess AI’s true impact

CEO Kim Dong-myung set a 30% productivity goal by 2030 through AI but gave no baseline, so whether this is incremental or a large change is unclear.
Operating margin in Q3 2025 was 10.5 percent, driven by more Energy Storage System (ESS) output and lower costs, but the company has not shared yield, scrap, or cost-per-kWh data 1.
Current AI work centers on using AI to automate tasks and update operations, yet the roadmap does not list capital needs or Return on Investment (ROI) timing 1.
The company has not shared capacity use or factory efficiency baselines. Investors and large buyers such as automakers and utilities cannot judge whether a 30% lift would change its standing in a crowded battery market.

Energy Storage System (ESS) procurement acceleration creates opportunities for North American and European integrators

ESS backlog was about 120 GWh in Q3 2025 1. That means a large pipeline of grid projects that will need integration.
Recent European Battery Energy Storage System (BESS) awards reached about 800 MW across Germany, Belgium, Portugal and Italy, plus other markets 2. These deals will need contractors for Engineering, Procurement, and Construction (EPC) plus maintenance providers with system integrators. (These firms combine batteries with inverters plus software and controls into a working system.)
In the US, storage deployments reached 11.9 GW in 2024 with more than 74 GW expected from 2024 to 2028 3. That will drive demand for fixed-price turnkey arrangements (single-scope delivery at a set price) and build-transfer agreements (the developer builds the asset then transfers ownership to the buyer, typically a utility).
Energy Management System (EMS) vendors and cybersecurity firms can pursue utility-scale BESS tenders 3. Contracts now stress safety systems, fire risk mitigation, and operational monitoring.