Analysis of the Impact of LG Energy Solution's Q4 Severe Losses on the Global Power Battery Competitive Landscape and Industrial Chain Investments

Based on the in-depth research and data collection above, I now provide you with a systematic and comprehensive analysis report.

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According to the latest financial data, LG Energy Solution recorded an

(approximately RMB 650 million) in the fourth quarter, while the market had widely expected a profit of KRW 33.05 billion. There is a between actual performance and expectations, with the profit shortfall exceeding KRW 155 billion [1]. This loss marks one of the company’s worst quarterly performances since its spin-off and listing in 2022.

Impact Factor	Details
Sharp Revenue Decline	2025 revenue reached approximately KRW 11.2 trillion, down 11.3% YoY
Increasing Cost Pressures	Fluctuating raw material prices and insufficient capacity utilization led to rising unit costs
Customer Order Losses	Strategic adjustments by key customers such as Ford directly hit revenue expectations
Increased R&D Investment	Funds are consumed by the technical transition to lithium iron phosphate (LFP) batteries and the development of solid-state batteries

From mid to late December 2025, LG Energy Solution suffered an

, with cumulative lost orders totaling (approximately RMB 65 billion) in just 10 days [2]:

• Ford Motor Order Cancellation
  : The KRW 9.6 trillion contract to supply 75GWh of power batteries starting in 2027 was terminated, with only 34GWh of orders retained and delivery dates postponed [2]
• Freudenberg Group Order Cancellation
  : The KRW 3.9 trillion contract for standardized battery module supply was terminated due to the customer’s decision to exit the battery industry [2]

This chain reaction directly exposed LG Energy Solution’s vulnerability of high dependence on a single customer: Ford once contributed 15% of its North American market revenue.

Facing cash flow pressures, LG Energy Solution adopted a

:

• Sold assets of the L-H Battery Company in Ohio to Honda’s U.S. subsidiary for
  KRW 4.2 trillion
  (approximately USD 2.86 billion) [3]
• Continued to use facilities through a leasing model to reduce fixed asset occupation
• Accelerated the transition to energy storage business, shifting new production lines in Arizona and Michigan to energy storage battery production

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According to data from South Korea’s SNE Research, global power battery installations reached

from January to November 2025, a year-on-year increase of 32.6%. However, the market landscape is undergoing profound changes:

Rank	Enterprise	Installations (GWh)	YoY Growth Rate	Market Share
1	CATL	400	34.5%	38.2%
2	BYD	175.2	31.3%	16.7%
3	LG Energy Solution	96.9	11.1%	9.3%
4	CALB	50.9	42%	4.9%
5	Gotion High-Tech	44.9	77.8%	4.3%
6	SK On	40.6	14.1%	3.9%
7	Panasonic	38.5	23.1%	3.7%
8	Samsung SDI	27.1	-5.1%	2.6%

Three South Korean enterprises, LG Energy Solution, SK On, and Samsung SDI, are seeing a

in their market shares:

• LG Energy Solution
  : Fell from 13.5% in 2022 to 9.3% in 2025, a 4.2 percentage point drop over four years [4]
• SK On
  : Fell from 7.0% in 2022 to 3.9% in 2025 [4]
• Samsung SDI
  : Fell from 7.5% in 2022 to 2.6% in 2025, with installations recording negative growth [4]

1. Misjudgment of Technical Route
   : Bet on the ternary lithium battery (NCM) route, while lithium iron phosphate (LFP) batteries, with a 15% cost advantage, saw their market share rise from 38% in 2023 to 52% in 2025 [5]
2. Competition from Chinese Players
   : 6 Chinese enterprises occupy 6 spots in the Top 10, with a combined market share of 55%
3. Weak Demand in Europe and the U.S.
   : The growth rate of the U.S. electric vehicle market has slowed, and subsidy policies are uncertain

The global power battery market is undergoing a

:

Technical Route	2023	2024	2025	Trend
Lithium Iron Phosphate (LFP)	38%	52%	60%	↑ Continued Growth
Ternary Lithium Battery (NCM)	55%	42%	35%	↓ Rapid Decline

LG Energy Solution previously focused mainly on ternary lithium battery technology, lagging behind in the layout of lithium iron phosphate (LFP) batteries, and was forced to accelerate its technical transition. The company launched the construction of domestic LFP battery production lines in 2025, with plans to officially put them into operation in 2027 [5].

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Investments in China’s lithium battery industrial chain in 2025 showed

characteristics:

Segment	Investment Amount (CNY 100 million)	YoY Growth Rate	Characteristics
Total Industrial Chain	8,200	+74%	Growth Driven by Energy Storage
Lithium Battery Manufacturing	3,485	+92%	Led by Leading Enterprises
Cathode Materials	821	+127%	LFP Becomes the Focus
Anode Materials	614	+100%	Silicon-Carbon Anodes Emerge
Electrolyte	186	+85%	Increased Concentration of Leading Players
Separator	113	+60%	Wet-Process Separators Dominate

1. Sharp Drop in Billion-Yuan Projects
   : There were 29 billion-yuan projects in 2023, dropping to 10 in 2024, and only 7 in 2025 [6]
2. Decline in Average Investment per Project
   : The industry has shifted from “rapid large-scale expansion” to precise layout
3. Favor for Niche Segments
   : Sodium-ion batteries, solid-state batteries, and energy storage batteries have become new investment hotspots

• CATL invested CNY 2.56 billion to increase capital in Jiangxi Shenghua, holding 51% of the shares [7]
• CATL invested CNY 2.6 billion to acquire shares in Tianhua New Energy, becoming the second-largest shareholder [7]
• CALB strategically acquired shares in Shengxin Lithium Energy, locking in 200,000 tons of lithium salt supply until 2030 [7]

The global energy storage market is experiencing

, providing an important hedging track for battery enterprises:

Year	New Energy Storage Installations (GW)	YoY Growth Rate
2024	70	-
2025	94	+35%
2026E	120	+28%
2030E	220	+17%

LG Energy Solution has regarded the energy storage business as a “lifeline”, planning to increase its energy storage battery production capacity to 50GWh in 2025, a 60% increase from the original target, with approximately 80% produced in North America [2].

Driven by the U.S. Inflation Reduction Act (IRA), the battery industrial chain is undergoing

:

• Southeast Asia
  : Thailand, Malaysia, and Indonesia have become the top choices for Chinese enterprises going overseas, including Sunwoda’s Thailand plant (CNY 10.9 billion) and EVE Energy’s Malaysia plant (CNY 8.6 billion) [6]
• Europe
  : Faces localization pressure, but has obvious cost disadvantages
• North America
  : LG Energy Solution’s asset sale to Honda reflects a new “asset-light + technology licensing” model

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Risk Type	Impact Level	Specific Performance
Slowing Demand Growth	High (75)	Slowing growth rate of electric vehicle penetration in Europe and the U.S.
Policy Subsidy Reduction	High (70)	U.S. cancellation of electric vehicle tax credits
Overcapacity Risk	Medium (65)	Intensified differentiation in industry capacity utilization
Fluctuating Raw Material Prices	Medium (60)	Fluctuations in lithium, cobalt, and nickel prices

Opportunity Areas	Impact Level	Investment Logic
Strong Demand for Energy Storage	+45	Surge in demand for AI data centers and grid peak regulation
Demand for Technical Upgrading	+35	Opportunities for iteration of solid-state batteries and sodium-ion batteries
Supply Chain Restructuring	+30	Regionalized production creates new opportunities

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1. LG Energy Solution’s Dilemma is a Microcosm of the Industry
   : Q4 losses and order cancellations reflect the growing pains of the global power battery industry’s transition from “wild growth” to “meticulous cultivation”

2. Strengthened Dominance of Chinese Players
   : CATL + BYD hold a combined 55% market share, forming a “duopoly” pattern, while Japanese and Korean enterprises see their shares continue to shrink

3. Technical Route Determines Competitiveness
   : LFP batteries have risen comprehensively, while the share of ternary lithium batteries has shrunk; the choice of technical route has become a watershed for enterprises

4. Energy Storage Track Becomes a Must-Compete Area
   : Battery giants are transitioning to energy storage, and the industry presents a “power + energy storage” dual-drive pattern

5. In-depth Reshaping of Investment Logic
   : Shifting from scale competition to efficiency priority, the “equity + long-term agreement” model has become a new paradigm for supply chain cooperation

Investment Direction	Recommendation Level	Logic
Energy Storage Batteries	★★★★★	Demand grows by over 30% annually, driven by both policies and AI
LFP Materials	★★★★☆	Continuous increase in market share, improved capacity utilization
Leading Battery Enterprises	★★★★☆	Increased concentration, strengthened leading enterprise advantages
Solid-State Battery Technology	★★★☆☆	Long-term track, but commercialization still takes time
Japanese and Korean Battery Enterprises	★★☆☆☆	Downward share trend continues, watch cautiously

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[1] Analysis of LG Energy Solution’s Q4 Financial Report - Sina Finance

[2] Battery Giant Suffers Heavy Blow! CNY 65 Billion in Orders Cancelled - EET-china

[3] LG Energy Solution’s Asset Restructuring: How Honda’s U.S. Electrification Strategy Takes Shape - News18a

[4] Global Power Battery Installations (Jan-Nov 2025) - NetEase Finance

[5] Top 10 International News in the Battery New Energy Industry 2025 - Gasgoo Auto

[6] CNY 453.1 Billion! Inventory of 2025 Battery New Energy Investment and Expansion Projects - Sina Finance

[7] The Battle for the Lithium Battery Supply Chain Amidst the CNY 820 Billion Expansion Wave - Sina Finance

[8] Power Battery Installations (Jan-Nov 2025): CATL and BYD Lead - Sohu Auto