LG Energy, once fixed on EV batteries, jumps to Plan B

Battery firm LG Energy Solution is shifting its focus away from electric vehicle (EV) batteries to energy storage systems (ESS), according to a report. The company's president for North America, Robert Lee, stated that most of LG Energy's US factories are now producing and gearing up for energy-storage batteries. This pivot comes as demand for large battery cells to store power surges, driven by the expansion of AI data centers.

The surge in ESS demand is a result of the EV boom not materializing as anticipated. South Korea's LG Energy, which is North America's largest battery producer by cells count, said five out of its eight regional factories will focus on ESS by year-end. The Lansing plant in Michigan, where the company is based, currently manufactures cells for utilities and will also produce cells for Tesla and Toyota EVs.

Shifting to LFP chemistry has been a complicated process for LG Energy, as they have limited experience with this type of battery. While LFP batteries are considered safer and more durable, they have lower energy density than nickel-based batteries, which means shorter driving ranges. However, this chemistry is suitable for storing large amounts of energy from power plants and could be a good fit for the growing ESS market.

Despite the shift, LG Energy is still manufacturing nickel-based EV batteries. The joint venture plant it shares with General Motors in Ohio recently resumed production of cells for GM EVs after a seven-month shutdown. Lee remains optimistic about the future of EVs, stating that they will eventually make up the majority of passenger vehicles in the US, though it may take time.