LG New Energy "Recalls Veterans"

(Source: Qidian Lithium Battery)

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2026 (Second) Qidian Lithium Battery Cylindrical Battery Technology Forum and Top 20 Cylindrical Battery Rankings Launch Conference

Event Theme: Full-Edge Ear Technology Leap Forward, Leading the Large Cylindrical Market

Event Date: April 10, 2026

Event Location: Venus Hall, 3rd Floor, Venus Royal Hotel, Bao’an, Shenzhen (Shenzhen International Convention and Exhibition Center, Jingji Baina Store)

Organizer: Qidian Lithium Battery, Qidian Research Institute SPIR

Sponsors and Speakers: Duofuduo New Energy / Penghui Energy / Chune New Energy / Chuanyuan Technology / Pengjin Intelligent / Dazhu Lithium Battery / Yixinfeng / Lanjing New Energy / Lihua Power / Chuangming New Energy / Xiaolu Lithium Battery / LiviNeng / Liandong Tianyi / Baolixin / Jiazhi Xinno / Fuyue Technology / Huapusen / Gaoshi Technology / Youyan New Energy / Zhongbi New Energy, etc.

Previously, LG New Energy, which underwent large-scale layoffs and slimming down, is now expanding again.

Qidian Lithium Battery has learned that LG Energy and General Motors’ joint venture factory Ultium Cells announced a recall policy for veterans. The 700 employees laid off in January are expected to return to work this month.

The reason is that the factory has begun transformation, converting the power battery production line into energy storage batteries. The cost of modifying the production line has reached $70 million (500 million RMB). Starting trial production requires manpower, which also means that full-scale mass production plans in Q2 are imperative this year.

In terms of energy storage, LG New Energy also secured a major order. The U.S. government has confirmed LG New Energy’s cooperation with Tesla, indicating that its business has a “safety net,” and accelerating the transformation of production lines. However, products produced by Ultium Cells mainly serve grid operators, AI data centers, and other industry clients.

This also indirectly shows that LG New Energy reacts quickly to market changes, shifting rapidly from large-scale stopping of power battery orders to transforming energy storage lines. It indicates a strong survival instinct and reflects that the core of global energy transition is no longer just electric vehicles; energy storage is becoming a key driver of its transformation.

The recall of Ultium Cells coincides with the transformation of the Tennessee factory’s production line. Originally mainly producing power batteries, orders gradually decreased in 2025, and capacity began to idle, making it unsustainable to bear operational costs. Half of the staff was laid off. Meanwhile, the U.S. energy storage market has begun to explode, driven by the need for massive power to upgrade grids for AI data centers. As a result, demand for batteries is changing, but most energy storage batteries come from Chinese companies. Therefore, South Korea’s three major battery manufacturers have begun to transform, with LG New Energy reacting the fastest.

LG New Energy is upgrading some power battery lines to save costs and maintain factory operations, using idle lines to take on new orders. Under this plan, the Tennessee, Michigan, and Windsor, Canada factories are all undergoing capacity upgrades. The local Cangwu factory is also being transformed, with GWh-level lithium iron phosphate battery production expected to start next year.

Moreover, LG New Energy’s energy storage plan is ambitious, aiming to establish 60 GWh capacity this year, with 80% located in North America.

However, this transformation faces significant financial pressure. Many power battery orders were canceled earlier, and although there was some profit last year, upgrading production lines requires starting from equipment, making the actual transformation quite challenging. Since late last year, Ford, FBPS, and others have lost orders worth about 65 billion RMB, so moving forward will be a heavy burden for the company this year.

Despite holding Tesla’s energy storage orders, LG New Energy faces fierce competition. The North American energy storage market is mainly dominated by Tesla and BYD, with their combined share reaching 60%. CATL is also breaking through with lithium iron phosphate batteries, especially as its Hungary factory’s energy storage products are waiting to go overseas, along with products from the Gotion Slovakia plant starting to ship. It’s not easy for LG New Energy to carve out a share.

Additionally, a new trend is emerging: the scale of the battery industry has reached a ceiling. Pure capacity competition has been pushed to the limit during the reshuffle period. The next phase will focus on quality—companies’ ability to refine batteries and automate processes. High technology and low costs are now key, demanding higher standards for cash flow management.

In terms of technology, recalling experienced veterans is more suitable than training new staff, which is also a major reason for LG New Energy’s employee recall. The next step is to continuously control product costs, ideally bringing iron lithium battery prices in line with competitors. However, LG New Energy has always adhered to a high-end route, so whether it will “lower itself” remains to be seen.

Some of the production line upgrades will enable LG New Energy to develop a dual-driven model of power and energy storage. From the current environment, dual-drive is the safest strategy. CATL relies on this advantage to maintain long-term leadership, and companies like Ruipu have also achieved performance rebounds through dual strategies.

Regarding products, LG New Energy CTO Kim Dong-myeong also introduced the performance of their newly developed lithium iron phosphate batteries, which have higher energy density and cycle life compared to existing products, aiming to elevate lithium iron phosphate battery technology and create high-value energy storage solutions.

LG New Energy’s confidence in creating high-end lithium iron phosphate batteries stems from the rapid growth of AI data centers. Compared to traditional energy storage projects, data center storage demands higher performance and other parameters. LG New Energy hopes to differentiate itself in this track.

In summary, LG New Energy’s comprehensive approach involves first transforming capacity to gain customer trust, then strengthening technological reserves with reliable products, and finally expanding capacity plans to realize a grand blueprint. Besides energy storage, LG New Energy is also continuously expanding its product matrix, seeking unexpected gains from emerging sectors such as robotics, ships, urban air mobility, and space industries.