Lead
South Korea's LG Energy Solution Ltd. has begun producing battery cells for energy storage systems (ESS) in the United States, pivoting production lines originally built for electric vehicles (EVs) to address slowing EV demand and capitalize on the growing energy storage market.
The company said Friday that its joint venture with Honda Motor Co., L-H Battery Co., has started mass production of lithium-ion battery cells for ESS at its plant in Jeffersonville, Ohio. The plant was originally designed to manufacture EV battery cells, but LG Energy Solution shifted its strategy to focus on ESS batteries in response to changes in the U.S. regulatory environment for EVs and the strong growth prospects of the energy storage market.
In a separate announcement, the company said it has begun producing lithium iron phosphate (LFP) battery cells for ESS at its joint venture plant with General Motors Co. in Tennessee, operated by Ultium Cells LLC.
Coverage comparison
Yonhap News Agency reported both developments in separate articles. One article, published July 3, focused on the Ohio plant operated by L-H Battery, a joint venture with Honda. The other, published July 8, detailed the start of LFP cell production at the Tennessee plant operated by Ultium Cells, the joint venture with General Motors.
Both reports attributed the production shift to the prolonged slowdown in the EV market and the need to better utilize existing manufacturing facilities.
Key claims
- LG Energy Solution's joint venture with Honda, L-H Battery Co., began mass production of lithium-ion battery cells for ESS at its plant in Jeffersonville, Ohio, on July 2 (U.S. local time), as reported by Yonhap.
- The Ohio plant was originally designed for EV battery cell production but shifted to ESS due to changes in the U.S. regulatory environment for EVs and growth prospects in the energy storage market, according to the company.
- L-H Battery plans to maintain a flexible production portfolio, manufacturing battery cells for hybrid EVs as well as ESS, depending on market demand, the company said.
- The battery cells from the Ohio plant will be supplied through LG Energy Solution Vertech, the company's North American ESS system integration subsidiary, for use in power grid, commercial, industrial and residential ESS applications across the U.S.
- At the Tennessee plant, Ultium Cells LLC temporarily halted operations in January at its first plant in Ohio and its second plant in Tennessee due to slowing demand for EVs, Yonhap reported.
- In March, the company announced it would invest 106.1 billion won (US$70 million) to convert part of the Tennessee plant's EV battery production lines into ESS battery production lines, with production beginning in the second quarter.
- The LFP cells produced in Tennessee will be supplied through LG Energy Solution Vertech for local cable network projects, renewable energy-related ESS facilities, and power infrastructure for AI data centers, the company said.
- LG Energy Solution has been expanding ESS battery production in the U.S. to offset the prolonged slowdown in the EV market, Yonhap reported.
- The company also plans to begin ESS battery cell production at its wholly owned battery plant in Michigan later this year.
- According to market research firm SNE Research, North America's ESS battery market is expected to expand sharply, with annual battery shipments projected to increase from 88 gigawatt-hours (GWh) last year to 485 GWh by 2030 and 976 GWh by 2035.