LG Energy Solution (LGES) is increasing its energy storage system (ESS) manufacturing capacity in North America to enhance its supply chain and secure a bigger portion of the region’s rapidly expanding market.
Ultium Cells, a collaboration between LGES and General Motors, started mass manufacturing of lithium iron phosphate (LFP) battery cells for ESS at its facility in Spring Hill, Tennessee.
Also Read: Indonesia Sees Russia Partnership Key to Economic Transformation
Commercial manufacturing at the Tennessee site began roughly four months after Ultium Cells revealed intentions to convert some of its electric vehicle (EV) battery production capability into energy storage system (ESS) production.
The joint venture allocated around $70 million for the conversion, allowing the plant to commence large-scale production of LFP cells in the second quarter.
The batteries manufactured at the Tennessee facility will be delivered through LGES' U.S.-based ESS system integration division Vertech, supporting utility-scale, commercial, industrial, and residential energy storage initiatives nationwide.
The shift demonstrates the firm's strategic change towards the rapidly expanding ESS sector as EV demand growth slows in North America.
Utilizing current manufacturing resources, the company seeks to enhance factory productivity while creating a more adaptable production system that corresponds with changing demand. The firm anticipates that batteries produced in the US will meet the requirements for the Inflation Reduction Act incentives, enhancing their cost competitiveness
Last year, it started large-scale production of ESS batteries at its site in Holland, Michigan, marking the region's first operation of this kind. Earlier this month, L-H Battery Company, along with its partnership with Honda in Ohio, commenced the production of ESS battery cells.
Also Read: BMW Korea Pins High Hopes on iX3 Electric SUV
LGES aims to commence ESS cell manufacturing at its Lansing, Michigan site later this year, with a goal of achieving over 50 gigawatt-hours of yearly ESS production capacity throughout North America by year’s end.
The cells produced in Tennessee are tailored to comply with Made in USA standards set by the Inflation Reduction Act, reducing tariff risks and assisting the joint venture in competing on pricing with Asian ESS providers. Executives indicated that the cells are being arranged for grid stabilization initiatives, renewable energy-related storage systems, and power infrastructure supporting AI data centers, where demand is significantly increasing throughout North America.
Employees of Ultium Cells in Tennessee, who were furloughed since January, have resumed work on the modified line.
The Tennessee transition mirrors a recent decision at LG Energy’s Honda Motor Co. joint venture, L-H Battery Company, in Ohio, where production of ESS cells commenced last week, replacing EV batteries.
Also Read: Samsung Electro-Mechanics bags MLCC Supply Deal With Tech firm
LG Energy intends to commence ESS cell manufacturing at its Lansing, Michigan facility prior to year-end, which is a component of its strategy to establish over 50 gigawatt-hours of ESS capacity in North America by that time.