--- title: "Korea" canonical: "https://anchor.is/the-hysteresis/issue/5/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/5/korea" issue: 5 section: "korea" description: "LG, Samsung, SK — beyond the headlines" authors: ["Elise Huan-Cartwright"] published: 2026-07-12 updated: 2026-07-11 articles: 15 --- # 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 5 — Korea LG, Samsung, SK — beyond the headlines ### Proof-File Scorecard Everyone knows the Korean ESS pivot story. What follows is the evidence file. This dashboard scores LG Energy Solution, Samsung SDI, and SK On across five dimensions of North American ESS readiness: named customers, named facilities with production evidence, 45X bridge disclosure, LFP conversion status, and compliance inputs. Each dimension is either publicly verifiable or marked empty. The gaps tell you more than the announcements. Three cross-cutting cards frame the competitive context: China's current shadow price for LFP ESS cells, Tesla's deployment pull as the largest single demand signal, and the post-OBBBA compliance reality that assembling cells on US soil no longer guarantees 45X eligibility. - **LGES Holds the Only Populated NA ESS File** — [Source]() — Published 2026-07-10 Tag: LG Energy Two named NA ESS customers: DTE Energy (6 GWh) and Tesla (Lansing LFP prismatic, $4.3B, 2027 SOP for Megapack 3). Windsor pack line operational since June 2026. 45X bridge disclosed at KRW 190B for Q1 2026. Still missing from the public record: facility-level yield data, MACR workpapers, and customer-accepted output volumes. - **Samsung SDI Has Compliance Inputs, No Output Evidence** — [Source]() — Published 2026-07-10 Tag: Samsung SDI Zero named NA ESS customers on public record. StarPlus has been converting EV-to-ESS lines since Q4 2025; LFP mass production targets Q4 2026. The L&F cathode deal (KRW 1.6T over three years from 2027) reads as PFE mitigation groundwork. Korea's sole prismatic maker, though that only matters where buyers specify format. 45X contribution not separately disclosed. Line-level GWh, yield, and customer acceptance remain dark. - **SK On Has No NA ESS File Whatsoever** — [Source]() — Published 2026-07-10 Tag: SK On No named North American ESS customers. No identified NA ESS production lines. The sole public ESS evidence is a 284 MW Korean government tender win (50.3% of total allocation), delivery by end-2027. Jurisdictionally irrelevant for US BESS procurement decisions. Commerce, Georgia workforce cut 37% in March 2026. 45X bridge not disclosed. - **China ESS Cells Drift Lower, Systems Hold Flat** — [Source]() — Published 2026-07-10 Tag: Price Signal InfoLink, July 8: 280 Ah and 314 Ah LFP ESS cells averaged RMB 0.373/Wh, down roughly 1% WoW. Two-hour DC-side systems flat at RMB 0.50/Wh. This is the shadow price Korean ESS supply competes against, but only where Chinese origin is executable for the buyer. Where FEOC rules bind, it's a floor that doesn't apply. - **Tesla Storage Deploys 13.5 GWh in Q2 2026** — [Source]() — Published 2026-07-10 Tag: Demand Signal Up 53% QoQ from 8.8 GWh, up 40% YoY from 9.6 GWh. Second-largest quarter on record behind Q4 2025's 14.2 GWh. The LGES Lansing supply agreement for Megapack 3 sits inside this visible deployment ramp. SOP still 2027. - **Plant Location Alone Does Not Secure 45X Anymore** — [Source]() — Published 2026-07-10 Tag: Compliance Risk Post-OBBBA, 45X eligibility requires MACR calculations and PFE constituent-material tracing that go well beyond where the cell is assembled. IRS Notice 2026-15 provides interim guidance. No Korean maker has publicly disclosed MACR workpapers or constituent-material cost shares for any North American facility. The retention risk is real and unquantified. - **One File Populated, Two Essentially Empty, None Profitable** — [Source]() — Published 2026-07-10 Tag: Proof Files LGES is the only Korean maker with a verifiable NA ESS supplier file: named customers, disclosed 45X bridge, facilities producing cells and packs. Samsung SDI shows compliance-input activity but no output evidence a procurement team can underwrite. SK On has nothing on the NA ESS record. And none of the three demonstrates subsidy-adjusted profitability in North American operations. ### LGES Earnings Decomposition - [LGES Q1 2026 — Two Second Derivatives Moving in Opposite Directions]() — By [Elise Huan-Cartwright]() · Published 2026-07-10 · Format: The Earnings Decomposition LGES's underlying operating loss narrowed QoQ — roughly KRW -398B in Q1 versus KRW -455B in Q4 2025. But the North American production incentive covering that loss fell faster, down 43% to KRW 190B, so the reported loss widened to KRW -208B. The subsidy bridge is shortening from both ends. Post-quarter ESS contracts with DTE, Tesla, and NextStar are the densest forward proof file of any FEOC-compliant US supplier. None hit the Q1 operating line. The four-quarter decomposition shows where the gap between pipeline and income statement sits. ### The 45X Retention Problem - [45X Eligibility Now Traces Through the Cathode]() — By [Elise Huan-Cartwright]() · Published 2026-07-10 The [material-assistance exclusion](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section45X&num=0&edition=prelim) under PL 119-21 redefines "eligible component." A battery cell produced in Michigan or Indiana is not an eligible component if its constituent-material cost ratio (MACR) falls below threshold. The MACR calculation under [Notice 2026-15](https://www.irs.gov/pub/irs-irbs/irb26-11.pdf) traces through resellers to the entity that mined, produced, or manufactured each input. A Korean cathode processor sourcing Chinese precursor does not insulate the chain. ### Primary Sources - **LG Energy Solution Q1 2026 Business Performance** — [Source]() — Published 2026-07-10 Primary Q1 filing: KRW 208B operating loss, KRW 190B NA incentive contribution, 50+ GWh ESS capacity roadmap. - **LG Energy Solution 2025 Financial Results** — [Source]() — Published 2026-07-10 Full-year anchor: KRW 23.7T revenue, KRW 1.3T operating profit with incentives, 140 GWh ESS backlog, 40%+ capex cut. - **LGES Vertech and DTE Energy Agree on 6 GWh Michigan BESS Portfolio** — [Source]() — Published 2026-07-10 Named 6 GWh BESS contract specifying US/Canadian cell sourcing; strongest post-Q1 proof point for ESS order conversion. - **Samsung SDI Signs KRW 1.6T LFP Cathode Deal with L&F for StarPlus** — [Source]() — Published 2026-07-10 Non-Chinese LFP cathode supply locked for Indiana ESS production from 2027; clearest PFE compliance-input move among Korean makers. - **DOI Indo-Pacific Energy Summit: Tesla-LGES $4.3B Lansing LFP Prismatic Supply Agreement** — [Source]() — Published 2026-07-10 Government-sourced confirmation of Tesla-LGES Lansing LFP prismatic deal targeting 2027 Megapack 3 cell supply. - **InfoLink ESS Spot Price, July 8 2026** — [Source]() — Published 2026-07-10 Current China benchmark: 280/314 Ah LFP cells at RMB 0.373/Wh average, two-hour DC systems flat at RMB 0.50/Wh. ## Other sections in Issue 5 - [Signal]() - [China]() - [The Log]() - [Defense]() - [Qualification]() ## More - [Publication guide]() - [Issue archive]()