---
title: "LG Energy Solution's record quarter runs on US tax credits, and LG Chem is selling 2.5 trillion won of stock"
description: "LG Energy Solution's record quarter shows AI's power shortage has become a battery business, with North American storage booked through 2028. The profit underneath is carried by US production credits and ends in a net loss, and the parent, LG Chem, is selling 2.5 trillion won of stock into the rally."
publisher: "The Inference"
section: "Power"
published: 2026-11-03T17:00:23.994Z
modified: 2026-11-03T17:00:23.994Z
canonical: https://theinference.org/article/lg-energy-solution-s-record-quarter-runs-on-us-tax-credits-and-lg-chem-is-selling-2-5-trillion-won-of-stock
language: en
keywords: "Batteries, Energy Storage, Earnings, Guidance, Korea, Data Centers"
---

# LG Energy Solution's record quarter runs on US tax credits, and LG Chem is selling 2.5 trillion won of stock

> LG Energy Solution's record quarter shows AI's power shortage has become a battery business, with North American storage booked through 2028. The profit underneath is carried by US production credits and ends in a net loss, and the parent, LG Chem, is selling 2.5 trillion won of stock into the rally.

[LG Energy Solution](https://theinference.org/markets/companies/lg-energy-solution), South Korea's biggest battery maker, just turned AI's power shortage into a record: [9.64 trillion won of third-quarter revenue](https://www.thelec.net/news/articleView.html?idxno=15222), up 59% and an all-time high [1][2]. Read past the record and the quarter forces a narrower judgment. The demand is booked years ahead, and the profit still arrives through a tax credit: [operating profit was 756 billion won, of which 417 billion won was US production credit](https://www.mt.co.kr/index.php/en/industry/2026/11/03/2026110310121118735) claimed under the Inflation Reduction Act, and the quarter still closed in a net loss [1].

## AI's power gap became an order book

Two upstream changes made this quarter possible. [Nvidia](https://theinference.org/markets/companies/nvidia), the chipmaker whose AI factories anchor the demand, began qualifying power gear against its reference designs, and in September LG became the only Korean battery maker on [its DSX Ready list](https://www.morningstar.com/news/pr-newswire/20260921cn52289/lg-energy-solutions-battery-energy-storage-system-qualifies-as-nvidia-dsx-ready-bess), with storage blocks built to smooth AI power load [3][4].

An August US executive order also restricted grid equipment from designated foreign entities, pushing utilities and data-center buyers toward LG's American plants and its non-Chinese supply chain [1]. Storage shipments rose more than 60% in the quarter and passed 30% of revenue; the backlog stands near 160 GWh, with North American volumes largely booked through 2028 [1][5]. Management [raised full-year sales growth guidance to 35 to 40%](https://biz.heraldcorp.com/article/10924040) [5].

## Credits and finance costs carry the quarter

Strip the credits out and the operating margin was 3.7% [1][4]. Below the operating line, derivative losses, interest and impairments added 987 billion won of non-operating items [1]. The balance sheet is financing the ramp: [debt-to-equity reached 171%, from 125% a year earlier](https://news.sbs.co.kr/english/article.do?news_id=N1008828272), and cash fell 2.9 trillion won in the quarter [1][2].

The fourth-quarter guide points the same way: revenue up about 10%, margins moderating as one-time customer payments lapse and the Honda joint venture's new storage lines add start-up costs [1][2]. Demand is no longer the bottleneck. Converting booked volume into unsubsidised margin is the work that remains, and it is where management says it is now concentrating [1].

*Chart: **Operating profit collapses to a net loss once credits and finance costs are counted** Bar chart of LG Energy Solution's Q3 2026 results: reported operating profit, operating profit excluding US production credits, non-operating losses, and net result, in billions of won*

*Q3 2026 consolidated figures in billions of won. Sources: LG Energy Solution Q3 earnings call transcript (The Elec, November 3, 2026); Money Today (November 3, 2026). [1][4]*

## The parent is selling the boom

The share register shows who gets paid first. The stock hit a four-month high above 400,000 won in early October, when [preliminary profit came in at more than double analyst consensus](https://finance.yahoo.com/energy/articles/lg-energy-solution-shares-hit-010640849.html), credits included [6].

On October 29, LG Chem, the chemicals group that controls LG Energy Solution, [said it would raise about 2.5 trillion won by selling a 2.79% stake through a two-year price-return swap](https://www.msn.com/en-xl/money/top-stocks/lg-chem-share-sale-triggers-10-drop-in-lg-energy-solution/ar-AA2gi9VE), on a stated path to a 70% holding by 2030; the shares fell more than 10% that morning [7]. The Inference mapped that supply queue on October 30 [7].

The batteries are booked through 2028. Part of the profit is still booked in Washington. Until the unsubsidised margin widens, this boom pays the parent and the big-tech buyers of certified storage first, and minority shareholders last.

## Takeaway

North American storage is booked through 2028, but 55% of the record quarter's operating profit is a US tax credit and the quarter still ends in a net loss, while LG Chem sells 2.5 trillion won of stock into the rally.

## Sources

1. [The Elec, full transcript of LG Energy Solution's Q3 2026 earnings conference call, 3 November 2026](https://www.thelec.net/news/articleView.html?idxno=15222)
2. [SBS News (English), "LG Energy Solution Expects Q4 Revenue to Rise 10%; North American ESS Supply Mostly Secured Through 2028", 3 November 2026](https://news.sbs.co.kr/english/article.do?news_id=N1008828272)
3. [PR Newswire via Morningstar, "LG Energy Solution's Battery Energy Storage System Qualifies as NVIDIA DSX Ready BESS", 21 September 2026](https://www.morningstar.com/news/pr-newswire/20260921cn52289/lg-energy-solutions-battery-energy-storage-system-qualifies-as-nvidia-dsx-ready-bess)
4. [Money Today, "LG Energy Solution Posts 756 Billion Won Operating Profit in Q3, Secures First Direct BESS Order from Big Tech", 3 November 2026](https://www.mt.co.kr/index.php/en/industry/2026/11/03/2026110310121118735)
5. [The Herald Business, "LG Energy Solution raises annual sales target to 40% growth on ESS boom", 3 November 2026](https://biz.heraldcorp.com/article/10924040)
6. [Yahoo Finance (Investing.com), "LG Energy Solution shares hit near 4-month high after Q3 profit more than doubles", 7 October 2026](https://finance.yahoo.com/energy/articles/lg-energy-solution-shares-hit-010640849.html)
7. [The Chosun Ilbo via MSN, "LG Chem share disposal triggers 10% plunge in LG Energy Solution stock", 29 October 2026](https://www.msn.com/en-xl/money/top-stocks/lg-chem-share-sale-triggers-10-drop-in-lg-energy-solution/ar-AA2gi9VE)


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LG Energy Solution's record quarter runs on US tax credits, and LG Chem is selling 2.5 trillion won of stock — The Inference. Canonical: https://theinference.org/article/lg-energy-solution-s-record-quarter-runs-on-us-tax-credits-and-lg-chem-is-selling-2-5-trillion-won-of-stock