LG Energy Solution begins LFP battery production for ESS in US
Korean battery maker turns to rising ESS demand amid EV slump
LG Energy Solution has begun the mass production of lithium iron phosphate, or LFP, batteries for energy storage systems, or ESS, at its manufacturing plant in Holland, Michigan, the Korean battery maker said Sunday.
According to LG Energy Solution, the rollout strengthens the company's local production capabilities in North America to enable the stable supply of batteries to major clients and swift responses, while avoiding the impact of US tariffs and securing more favorable cost competitiveness.
LG Energy Solution has also become the sole battery manufacturer currently mass-producing ESS-bound LFP batteries.
The Korean battery maker said the products being made at the US facility are long cell-based pouch-type models, which feature superior energy efficiency and safety at competitive prices. LG Energy Solution Vertech, a US-based ESS system integrator fully owned by LG Energy Solution, has signed deals to supply the ESS LFP batteries to several customers, including Terra-Gen and Delta Electronics.
LG Energy Solution emphasized that the mass production of LFP batteries for ESS marks a major milestone in the firm's strategic rebalancing efforts. The Korean battery maker has been actively pushing for rebalancing to increase the efficiency of its investments and cut down on unnecessary costs as external business uncertainties grow due to a temporary slowdown in the global EV market and political changes, such as tariffs, in key countries.
LG Energy Solution originally planned to begin mass production of ESS-bound LFP batteries at a new plant in Arizona in 2026. However, the company decided to accelerate the production roadmap by shifting the EV battery production lines at the Holland site into ESS production lines and optimizing related facilities.
Based on local production capacity, the battery maker plans to respond quickly to the soaring demand for ESS products in various industries such as AI-related data centers and eco-friendly energy.
According to market analysis by SNE Research, the global lithium-ion battery ESS market is projected to reach 618 gigawatt-hours in 2035, up from 185 GWh in 2023, with a compound annual growth rate of 10.6 percent. The market size is expected to hit $80 billion by 2035.
Earlier this year, LG Energy Solution also forecast that electricity consumption will continue to increase with more data centers being built to cope with the growing application of AI technology. Meanwhile, the proportion of new and renewable energy will expand greatly, resulting in more than a fivefold growth in ESS demand over the next 10 years.
'We are currently engaging in talks with various clients in the North American region about supplying ESS batteries,' said an LG Energy Solution official. 'We will continue to deliver value to customers based on our top-class technology and quick responses in local markets.'
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