As the United States has halted electric-vehicle purchase subsidies, Korea's three battery makers — LG Energy Solution, Samsung SDI and SK On — are turning their eyes to energy storage systems (ESS). To capture the ESS market, these companies are converting EV battery production lines at both their standalone plants in North America and their joint factories with automakers to ESS lines.
An industry official on the 5th said, "With the artificial intelligence (AI) boom driving a surge in power demand in North America, renewable power generation such as solar and wind has increased," and noted, "Because ESS is needed to overcome the intermittency inherent in renewables, the three battery makers are targeting this area."
The three battery makers have recently announced in succession that they will convert their North American battery plants to ESS production. LG Energy Solution in June converted an EV battery line at its plant in Holland, Michigan, to ESS lines and began early mass production of lithium iron phosphate (LFP) batteries.
LG Energy Solution will convert part of the line at its joint plant with Stellantis in Ontario, Canada, to ESS. During the third-quarter earnings conference call on the 30th of last month, LG Energy Solution said, "As demand in downstream markets is changing faster than expected, we are also discussing producing ESS batteries at the plant."
Samsung SDI will also convert its joint plant with Stellantis in Kokomo, Indiana, into ESS lines. In its third-quarter earnings conference call, Samsung SDI said, "At StarPlus Energy (SPE), our joint venture with Stellantis, we are converting EV lines to ESS lines," declaring that it will ramp up mass production of ESS batteries in North America.
Samsung SDI has started operating its nickel-cobalt-aluminum (NCA)–based ESS lines and aims to start operating its lithium iron phosphate (LFP)–based ESS lines from the fourth quarter of next year. Samsung SDI plans to expand ESS production capacity to 30 gigawatt-hours (GWh) annually by the end of next year. Samsung SDI is discussing an ESS battery supply contract with Tesla, and if talks are concluded, the line conversion is expected to accelerate.
SK On is reviewing plans to convert not only its standalone U.S. plants but also its joint plants with Ford and Hyundai Motor to ESS lines. In September, SK On signed a 1 GWh ESS contract with U.S. renewable energy company Flatiron Energy Development and secured the right of first negotiation for a 6.2 GWh project the company is pursuing in the United States through 2030.
SK On said, "Through line conversions, we expect to secure production capacity that can cover from the 1 GWh with confirmed ESS supply to the 6.2 GWh for which we hold the right of first negotiation, and even more than a potential 10 GWh," adding, "We are not ruling out utilizing joint plants with automakers."