Latest news with #JaehongPark
Mint
22-07-2025
- Automotive
- Mint
Battery makers in slumping EV business find lifeline elsewhere
Big U.S. EV battery makers are stepping back from the market that got them started and betting on a new set of customers in an entirely different business. Instead of carmakers, these companies have started making batteries for utilities, wind- and solar-power developers, and massive data centers that train artificial intelligence. Selling large, stationary batteries for 'energy storage systems," or ESS, used to be a niche market that wasn't worth much attention, said Jaehong Park, an executive at the battery arm of South Korean conglomerate LG. 'ESS was the ugly duckling for a long time within our organization," Park said. Five years ago, automakers and battery companies raced to build multibillion-dollar electric-vehicle battery plants across the U.S. South and Midwest, based on EV forecasts that proved too optimistic. Now, many of these plants are underused, delayed or stuck in limbo. Energy storage has emerged as an alternative, helping to compensate for the slowdown in electric vehicles. Tesla generates billions of sales from batteries for energy storage. Revenue from the storage segment, which also includes solar panels, grew 67% last year to $4 billion, partially offsetting a $6 billion fall in revenue from EV sales. Some of Tesla's biggest customers for its Megapack battery systems are utility-scale energy providers such as Intersect, as well as Tesla chief Elon Musk's separate artificial-intelligence company, xAI. xAI purchased $191 million of Tesla Megapack products in 2024, according to financial disclosures. Tesla didn't respond to a request for comment. On Wednesday, General Motors said it is exploring an arrangement to supply energy-storage batteries to Redwood Materials, a startup company focused on battery recycling. Under the proposed deal, GM would supply Redwood with a mix of new and used GM batteries for large battery-storage systems. 'Right now, there is a hunger for more energy from every source," Redwood founder J.B. Straubel said. Other battery makers are also pivoting. A Chinese-owned battery manufacturer that had planned to supply Mercedes-Benz is now considering energy storage to help get a stalled factory in Kentucky back on track. This shift is in response to a turn in U.S. electricity demand, which is growing again after about 15 years of stagnating. Several factors driving that growth are artificial-intelligence data centers, manufacturing and broader electrification. Energy storage systems can help offset power outages and manage this extra demand on the power grid. Installations of energy-storage batteries more than tripled in the U.S. from 2021 to 2024 and are projected to grow 34% in 2025, according to energy consulting firm Wood Mackenzie. 'If you have an outage of a massive data center or a giant gas plant, batteries can plug that hole," said Stephanie Smith, chief operating officer of Eolian, a battery and renewable-energy company owned by asset manager BlackRock. 'They can react in microseconds, and so you're able to address so many different problems on the entire grid." China has dominated the energy-storage battery market. Chinese manufacturers have spent decades honing the low-cost chemistry that works best for stationary batteries, said Sam Adham, a battery expert at CRU, a market-research firm. Even with the Trump administration's ratcheting of tariffs on Chinese imports, China is still often the lowest-cost option for storage batteries, he said. Now battery companies in the U.S. are trying to take on their Chinese battery unit, which co-owns EV battery factories with GM, Honda and Hyundai, became serious about diversifying its U.S. business in late 2023. The EV market was showing signs of softening, while the energy-storage business was heating up. At that time, the company was building out multiple battery plants around the U.S., and last year it decided to shift things around, in what one executive likened to playing Tetris with its footprint. A $1.4 billion expansion of its Holland, Mich., plant—originally planned for EV battery production—instead became LG's first U.S. facility dedicated to stationary storage batteries. It is using the same low-cost chemistry that Chinese companies have honed to dominate the business. 'We saw there is a rapid and urgently growing demand in the U.S. Here's an opportunity for us to address it more quickly," said Tristan Doherty, the company's chief product officer for storage batteries. The pivot put LG into the U.S. energy-storage business a year earlier than planned, he said. Even with the moves, the company's results were hit by the pullback in EVs, with sales shrinking 24% last year. It expects EV demand in the U.S. to fall 10% this year, and aims to slash its capital spending by as much as 30%. 'Rather than building new capacity on new sites, we do want to try to maximize and fully utilize the existing sites that we have as much as possible," Chief Financial Officer Chang Sil Lee said in January. Excelsior Energy Capital has signed an agreement to buy batteries from LG's new Michigan plant for its portfolio companies such as Lydian Energy, a utility-scale solar and battery developer. U.S.-made batteries ensure projects aren't thrown off course, said Anne Marie Denman, co-founder of Excelsior. 'We can look our buyers of power straight in the eye and say, 'This is a domestically sourced supply chain and we can commit to these timelines,' " she said. 'It isn't subject to geopolitical winds."
Yahoo
27-06-2025
- Automotive
- Yahoo
As EV growth cools, LG Energy turns to batteries for energy storage systems
HOLLAND, Mich. — LG Energy Solution, one of the top suppliers of batteries for electric vehicles, is expanding to power the electric grid and artificial intelligence data centers. In May, the company began producing lithium iron phosphate batteries for energy storage systems alongside the electric vehicle batteries it makes here in western Michigan. LG Energy sees energy storage batteries as a growth driver amid cooling EV sales growth and heightened uncertainty in the auto industry, said Jaehong Park, CEO of LG Energy Solution Vertech, the company's energy storage unit. 'It's a vital and strategic move under current economic uncertainty and supply chain issues,' Park said at a June 24 event marking the start of the company's energy storage system battery production. It wasn't long ago that LG Energy also planned for significant new EV battery production here. In 2023, LG Energy announced a $3 billion expansion of its EV battery production here to supply Toyota. But when General Motors backed out of a joint venture battery plant about 90 miles east in Lansing, Mich., LG Energy decided to make Toyota's batteries there. Now, Holland appears poised for growth outside the auto industry. It has spent $1.4 billion to produce lithium iron phosphate batteries for energy storage systems here. It's a choice that reflects dynamics in both industries. Sign up for the weekly Automotive News Mobility Report newsletter for the latest developments at the intersection of transportation and technology. Automakers are rethinking their North American electrification plans, scaling back production targets and delaying programs amid softer-than-expected EV sales growth. That's forcing LG and other major battery producers to pivot. But as EV investments cool in North America, the need for clean energy storage is rising as the U.S. power grid comes under increasing strain and as more artificial intelligence data centers come online, LG executives said. The Holland factory is the first of LG Energy's facilities in North America to produce LFP batteries for energy storage. The factory, LG Energy's oldest in North America, often serves as a model for its other plants in the region, making more dual-purpose factories a possibility as it adjusts to changing market conditions, executives said. The Holland factory 'has been through several different administrations, and it's been through several different ups and downs in the auto industry,' said Bob Lee, the North American president of LG Energy Solution. 'And now I think we're demonstrating a certain sense of resilience by moving into production of LFP cells for storage systems.' LG Energy is increasingly bullish on batteries for energy storage systems, as evidenced by annual production capacity in Holland. Its annual battery capacity for energy storage systems will stand at 16.5 gigawatt-hours per year, more than triple the 5 GWh per year it dedicates to EV battery production there. 'The growing part of our business is now providing batteries to energy storage systems,' Lee said. That's a shift for LG Energy, which has joint ventures with automakers including GM, Honda and Hyundai. 'When it came to the financial performance of the past, the EV market was 10 times bigger than' energy storage systems, Park said. 'That was the history until yesterday.' To be sure, LG Energy still sees opportunities for growth in the North American EV market. The Holland plant will also produce battery cells and modules for the Ford Mustang Mach-E, onshoring production from a facility in Poland, the company said. And most of its facilities in the U.S. remain committed to supplying EVs. The future of the EV market has only grown more uncertain in recent weeks. Congressional Republicans are deliberating how to end the $7,500 federal tax credit for EVs and plug-in hybrids as they craft a budget bill. LG Energy hopes rising energy storage demand will help offset further declines in EV sales growth. 'This is going to be an important, stable business opportunity,' Lee said. Lee will be a speaker at the 2025 Automotive News Congress in Detroit this September. Click here for tickets and more information. He will also join Automotive News for a LinkedIn Live conversation on June 30. Have an opinion about this story? Tell us about it and we may publish it in print. Click here to submit a letter to the editor. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26-06-2025
- Automotive
- Yahoo
Expanded LG plant in Holland could help fix rural EV charging crisis
LG Energy Solution plans to produce enough batteries to plug the holes in the strained U.S. electrical grid that make installing electric vehicle charging stations difficult in rural areas. How? By producing batteries large enough to be installed anywhere that capture enough solar and wind power to charge vehicles. The South Korean battery maker, the largest in the country, completed expansion of its Holland, Michigan, facility this month. The plant, operational since 2012, produces automotive vehicle batteries for partners including General Motors, Honda and Hyundai Motors. But the decision to use an over $1.4 billion investment to expand in a new direction ― manufacturing batteries for storage systems in addition to those for automotive use ― came two years ago, said Jaehong Park, CEO of LG Energy Vertech Inc., the company's energy storage branch, told media on June 24. 'There were multiple drivers at the time. We found that the EV demand was down,' Park said. 'Plus, there was always concern whether we can have enough engineering resources, technicians, in the facility.' Adding production of batteries for energy storage applications at its plant not only offers two revenue sources for battery technology ― making and charging batteries that power vehicles ― but it insulates the company from future headwinds at a critical time and demonstrates the resilience of battery production, according to North American President Bob Lee. 'Traditionally, large scale energy storage is not always easy. We depended on hills with a lake for hydro applications or large spaces for compressed air,' he said. 'Those are things you can't put anywhere. We have a solution: We can provide energy storage in any location where the energy is being used.' Demand for energy storage systems, or ESS batteries, is only increasing, and the flexibility when installing them is what makes the business model so durable, Lee said. Not only can ESS batteries charge vehicles through energy captured from so-called clean energy sources, but it can offset some strain from artificial intelligence data centers. Cell production is up now and can finish 30% of the packing of cells in Holland, the company said. By August, LG Energy Solutions plans to supplement cell packing at a retrofitted plant in the Chicago suburb of Madison, Illinois. Once fully operational, the company plans to produce close to three times as many energy storage batteries as electric vehicle batteries. More: Bill Ford says loss of federal funding could 'imperil' Marshall battery factory Producers of vehicle batteries, technically known as 'cells,' measure annual capacity not in terms of number of cells produced but instead in the total energy capacity of those batteries, according to the Federal Reserve Bank of Dallas. Gigafactories are manufacturing sites whose annual capacity exceeds 1 gigawatt hour, or 1 billion watt hours. For context, the entire U.S. generates several million gigawatt hours of electricity every year. An EV battery pack has a capacity between 50 and 100 kilowatt hours, the Federal Reserve Bank also notes, and a gigafactory with 1 gigawatt hour capacity operating at full capacity could produce enough batteries annually to power 10,000 to 20,000 electric vehicles. LG's Holland facility now has 16.5 gigawatt-hours of energy storage systems production capacity, Tristan Doherty, LG's chief product officer, told media ― enough to power roughly 165,000 electric vehicles per year. Capacity to produce automotive batteries reaches 5 gigawatt hours, making the total power produced at the plant an estimated 21.5 gigawatt hours. Still, the company said it was prepared to 'more than double' current capacity. LG's Holland factory began producing nickel-rich batteries most automakers use for electric vehicle batteries, the mixture of nickel, manganese and cobalt. Starting this May, the company became the first in the U.S. to produce lithium-iron-phosphate batteries, a less energy dense battery type. Using more iron has drawbacks, Lee said, including less charging capacity, but companies using the configuration get additional cost-cutting benefits, which allows for more competitive pricing models. Because automakers like General Motors estimate the cost of batteries to be over a third of the total cost of an electric vehicle, lowering battery costs can critically change a company's pricing strategy. LG Energy Solution plans to launch production of a new battery chemistry, called lithium manganese-rich batteries, in the U.S. by 2028 in partnership with General Motors. The company has not yet announced a production location for that type of battery. The new 'prismatic' battery cell, meaning it is stored in a more efficient rectangular shape instead of a pouch, makes them easier to integrate into cell packs. GM said this type of battery performs at a 33% higher energy density than the best-performing lithium-iron-phosphate-based cell that is currently the industry standard. LG Energy Solution now wholly owns and operates two battery facilities in the state of Michigan. The Holland location has produced batteries since 2012. LG Energy Solution also operates offices out of Troy for sales and R&D investigating future battery chemistries and formats, Lee said. LG Energy Solution fully acquired the battery cell manufacturing facility in Lansing on May 8 from Ultium Cells LLC, its joint venture with GM. The company has a total of eight manufacturing facilities operating or under construction in the U.S. Half operate through joint ventures: the Ultium Cells sites with GM in Warren, Ohio and Spring Hill, Tennessee; a Honda joint venture in Jeffersonwille, Ohio; and a Hyundai Motor Co. in Savannah, Georgia. Jackie Charniga covers General Motors for the Free Press. Reach her at jcharniga@ This article originally appeared on Detroit Free Press: LG battery plant in Holland sees storage as growth opportunity Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
