--- title: "Korea" canonical: "https://anchor.is/the-hysteresis/issue/4/korea" publication: "The Hysteresis" publisher: "The Hysteresis" language: "en-US" guide: "https://anchor.is/the-hysteresis/llms.txt" permalink: "https://anchor.is/the-hysteresis/issue/4/korea" issue: 4 section: "korea" description: "LG, Samsung, SK — beyond the headlines" authors: ["Elise Huan-Cartwright"] published: 2026-07-06 updated: 2026-07-05 articles: 14 --- # The Hysteresis > The Hysteresis exists to give a small cross-functional team — strategy, investment, and procurement — a shared weekly instrument for reading the battery supply chain earlier than consensus. Success means the team consistently identifies inflection points in cell pricing, supplier health, and policy enforcement weeks or months before they surface in earnings calls, annual surveys, or trade press. The commercial mechanism is internal-first: the publication proves itself as a decision tool inside the organization, then extends to paid subscribers and a practitioner community as upside. Revenue follows utility — if the team makes better-timed procurement calls and competitive assessments because of what they read here, the publication earned its place. [Read on the website]() ## Issue 4 — Korea LG, Samsung, SK — beyond the headlines ### Missing Denominators Q1 2026 earnings from the three Korean makers produced capacity targets, loss improvements, cathode deals, named ESS contracts. Specific figures, every one of them. And every one missing the denominator that would make it evaluable. Six claims below, each paired with what's absent, stale, or undisclosed. Utilization rates frozen at 2025 annual levels. 45X contributions hidden by one of three makers. FEOC-compliant capacity built on factory runs no Korean plant has sustained in two years. The numerator gets the IR deck. The denominator lives in the gap between filings. A holiday weekend seems right for measuring how much Western ESS supply depends on these three companies, and how little of that measurement they've actually made possible. - **LGES Targets 50 GWh, Hides the Utilization Rate** — [Source]() — Published 2026-07-04 Tag: Missing Utilization LGES targets 50 GWh North American ESS capacity by end-2026. No Q1 2026 utilization figure from the company, TrendForce, or SMM. The trailing 2025 rate is 47.6% (Seoul Economic Daily, March 2026). Apply it and effective output drops to roughly 24 GWh. - **Samsung SDI Q1 Loss Hides the 45X Number** — [Source]() — Published 2026-07-04 Tag: Undisclosed Incentive Battery segment operating loss of KRW 177 billion in Q1 2026. The IR deck breaks out no separate 45X production incentive figure. LGES disclosed KRW 190 billion for the same quarter. Without that line item, the underlying loss could be materially worse. Undisclosed is not zero. - **SK On's Loss Narrowed But Not in America** — [Source]() — Published 2026-07-04 Tag: Misleading Improvement Operating loss improved from KRW 440.8 billion to KRW 349.2 billion QoQ. SK Innovation credited Europe and Asia volume recovery, noting weaker North American sales explicitly. SK Battery America cut 958 workers, 37% of its Commerce, Georgia workforce, in March 2026 (AP, WARN notice). The US direction is negative. - **Samsung SDI Cathode Deal Doesn't Complete PFE File** — [Source]() — Published 2026-07-04 Tag: Compliance Gap KRW 1.6 trillion LFP cathode deal with L&F for StarPlus ESS production starting 2027. IRS Notice 2026-15 requires PFE cost accounting at the constituent-material level. A Korean cathode brand is an input to compliance, not proof of it. The precursor sourcing question remains open. - **The 80% FEOC Share Assumes Factories Run Full** — [Source]() — Published 2026-07-04 Tag: Capacity Mirage Analyst estimates give Korean makers over 80% of announced FEOC-compliant US ESS cell capacity, assuming 100% utilization. All three ran 47-50% in 2025 (Seoul Economic Daily). Effective supply is roughly half the headline. The originating analyst's own caveat assumed 70-80%, still above trailing rates. - **LGES Named ESS Contracts Still Lack Yield Data** — [Source]() — Published 2026-07-04 Tag: Demand Signal DTE Energy (1.5 GW / 6 GWh) and Tesla Megapack 3 (Lansing LFP prismatic, 2027 production) are named, scaled demand signals. Neither filing discloses facility yield, output volume, or customer acceptance. Lansing LFP production is still forward-dated. Named demand is stronger than backlog, weaker than qualified supply. ### Earnings Decomposition - [Samsung SDI Q1 2026 — Four Quarters of Blank Cells]() — By [Elise Huan-Cartwright]() · Published 2026-07-04 · Format: The Earnings Decomposition Samsung SDI's battery segment loss narrowed to KRW 177 billion in Q1 2026. Whether the improvement is organic or credit-driven is unknowable: the company has now declined to disclose its 45X production incentive contribution for four consecutive quarters. LGES disclosed KRW 190 billion in credits the same quarter, transparency that paradoxically makes it look worse on every headline comparison. The decomposition table that should anchor a supplier qualification decision has four trailing quarters of blank cells. We map what each absence prevents a buyer from modeling. ### The Utilization Gap - [The denominator nobody has refreshed]() — By [Elise Huan-Cartwright]() · Published 2026-07-04 No Q1 2026 utilization rate has been published for LG Energy Solution, Samsung SDI, or SK On. The latest figures are 2025 annual: LGES 47.6%, Samsung SDI approximately 50%, SK On 48.7%, per [annual reports disclosed March 16](https://en.sedaily.com/finance/2026/03/16/korean-battery-makers-utilization-rates-collapse-below-50) and [confirmed by SMM on March 31](https://news.metal.com/newscontent/103835263-SMM-Anlalysis-Korea%E2%80%99s-Battery-Industry-Enters-a-Phase-of-Utilization-Adjustment). That is 3.5 months of staleness. FEOC-compliant supply estimates, margin improvement narratives, ESS-absorbs-idle-EV-lines claims: all built on a denominator that last moved in March. ### Source Stack - **LG Energy Solution Q1 2026: The One Korean Earnings Deck That Shows Subsidy Math** — [Source]() — Published 2026-07-04 KRW 190 billion in disclosed US incentives lets you decompose the real operating loss. No peer does this. - **Samsung SDI Q1 2026: A KRW 177 Billion Battery Loss You Cannot Split Into Operations and Subsidy** — [Source]() — Published 2026-07-04 No separate 45X or production incentive line. Underlying economics stay opaque from public filings alone. - **Korean Battery Utilization Below 50%: A 2025 Number Still Doing All the Analytical Work** — [Source]() — Published 2026-07-04 SMM's 47–50% annual figure for all three makers remains the last public baseline. No Q1 2026 update exists. - **Samsung SDI's KRW 1.6 Trillion L&F Cathode Deal: A Compliance Input, Not a Completed Filing** — [Source]() — Published 2026-07-04 Non-China LFP cathode sourcing for StarPlus starts a MACR cost trail but does not complete one. - **IRS Notice 2026-15: Constituent-Material Cost Tracing Makes Supplier Nationality Insufficient for 45X** — [Source]() — Published 2026-07-04 MACR rules require cost-ratio proof at the material level under perjury penalties. An Indiana cell is a starting point. - **Ford 8-K: BlueOval SK Dissolved, Kentucky Plants Transfer With $3.8B in DOE Debt Attached** — [Source]() — Published 2026-07-04 Owner, customer, and credit basis all changed overnight. The cells did not become available qualified supply. ## Other sections in Issue 4 - [Signal]() - [China]() - [The Log]() - [Defense]() - [Qualification]() ## More - [Publication guide]() - [Issue archive]()