🧠 Food for thought

Implications, context, and why it matters.

The EV slowdown is speeding up a shift toward energy storage

• EV demand has softened, so LG Energy Solution is shifting factory output between electric vehicle batteries and Energy Storage Systems (ESS) 1.
• The company is chasing demand tied to AI data centers plus power grids, with global ESS installations forecast to rise by more than 40% in 2026 1.
• Results already changed, 2025 revenue slipped 7.6% as EV sales cooled while operating profit climbed 133.9% on solid ESS sales growth 1.
• The CFO said ESS will become a future “pillar of our growth and profitability” 2.

US-China friction and tax credits could change the ESS opening

• The shift fits proposed US rules that would limit certain grid batteries from China, which could lift non-Chinese suppliers 3.
• US-made batteries in energy storage projects may qualify for an investment tax credit (ITC) of about 30%, plus an added 10% domestic content adder, which totals about 40% while projects using Chinese cells may lose ITCs under Foreign Entity of Concern (FEOC)-related restrictions 4.
• LG Energy Solution plans to lift worldwide ESS capacity above 60 gigawatt-hours (GWh) in 2026, with more than 80% located in North America 1.
• The mix could lower reliance on cyclical EV demand, and push the company deeper into US energy buildouts backed by long-term data center plus grid spending 2.