Ultium Cells, the U.S. joint venture of LG Energy Solution and GM, said on the 18th it will start producing lithium iron phosphate (LFP) battery cells for energy storage systems (ESS) at the Ultium Cells plant in Spring Hill, Tennessee.
To that end, it invested $70 million (about 104 billion won) to convert part of its existing electric vehicle (EV) battery line into an ESS battery line, and will begin mass production in the second quarter.
ESS battery cells produced here will be supplied through Vertech, LG Energy Solution's North American ESS SI (system integration) subsidiary. They are expected to be used in a range of areas, including North American grid stabilization projects, ESS facilities linked to renewable energy, and power infrastructure for artificial intelligence (AI) data centers.
The production shift is a measure to boost plant operating efficiency in response to the slower pace of EV market growth. The Tennessee plant is currently retraining its workforce alongside equipment conversion. The 700 employees who were temporarily furloughed on Jan. will return for line setup and new product production.
Ultium Cells President Park In-jae said, "With this step, Ultium Cells is evolving into a diversified battery cell manufacturer," and added, "We will upgrade our production system in line with shifting market demand and solidify our position as the backbone and technology leader of the U.S. battery industry."
With this step, LG Energy Solution will secure a total of five ESS production networks in North America. In addition to three wholly owned plants—Holland, Michigan; Lansing, Michigan; and NextStar Energy in Canada—ESS production will also begin at the Ultium Cells Tennessee plant and the Honda joint venture plant in Ohio.
The Holland, Michigan, plant has been running a stable mass production system since June last year. NextStar Energy in Canada produced 1 million cells three months after starting mass production in Nov. last year. The Lansing, Michigan, plant will start mass production of pouch-type ESS batteries in the first half of this year and plans to produce prismatic LFP batteries next year. The Honda joint venture plant in Ohio aims to start production within the year by converting part of its EV line for ESS.
LG Energy Solution plans to more than double ESS production capacity by year-end to over 60 GWh globally, with more than 50 GWh in North America. As of the end of last year, it had secured cumulative orders of 140 GWh in the global market, and this year it is targeting new orders exceeding 90 GWh, above last year's record high.
An LG Energy Solution official said, "Building on the establishment of five major integrated manufacturing hubs in North America, we will accelerate local business growth and further strengthen productivity innovation and profitability improvement," adding, "By preemptively securing overwhelming production capacity in the ESS business, we will cement an unshakable leading position in the North American market."