LG Electronics Inc. is retreating from the energy storage business after a decade-long push, succumbing to intense competition from Chinese manufacturers that now control 86% of the global market.
The South Korean electronics maker has disbanded its product development team and will limit operations to maintaining existing installations, according to industry sources. The move follows the company’s 2021 exit from the solar panel business, also driven by Chinese competition.
The shift marks another setback for CEO Cho Joo-wan’s ambitious plans to expand LG’s business-to-business operations to 45% of revenue by 2030. The company initially gained traction in the US and European markets by integrating energy storage systems with its ThinQ smart home platform.
Chinese rivals gained dominance by offering lithium iron phosphate batteries that, while less energy-dense than LG’s nickel cobalt manganese technology, provided better value with more charge cycles at lower prices. This advantage proved crucial in the residential market, where cost is the primary consideration, according to Chung-Ang University professor Nam In-ho.
LG entered the market through a 7.7 billion won ($5.8 million) acquisition of LG Uplus’s Power Conversion System division. The company is now redirecting development staff to other B2B segments like climate control systems.
