South Korea’s LG Energy Solution (373220.KS) has officially commenced operations at its Lansing, Michigan plant, completing a five-hub production network targeting the North American energy storage system (ESS) market.

LG Energy Solution announced on the 19th that it held an opening ceremony for the plant in Lansing, Michigan on the 18th (local time). Attendees included Michigan Governor Gretchen Whitmer, U.S. Secretary of the Interior Doug Burgum, Republican Congressman Tom Barrett, Chicago Consul General Hong Sang-woo, and LG Energy Solution CEO Kim Dong-myung.

The Lansing plant is LG Energy Solution’s seventh production facility in North America, with an annual battery cell production capacity of over 35 GWh. It operates as a hybrid manufacturing hub producing both lithium iron phosphate (LFP) batteries for ESS and nickel-cobalt-manganese (NCM) batteries for electric vehicles.

North American ESS Production Network Expands to Five Hubs

With the Lansing plant now operational, LG Energy Solution has expanded its North American ESS production hubs to five. The network comprises three standalone production bases — the Michigan Lansing plant, Michigan Holland plant, and NextStar Energy Ontario plant in Canada — plus two joint venture facilities: the L-H Battery Company Ohio plant with Honda and the Ultium Cells Tennessee plant with GM.

These production facilities are designed as hybrid manufacturing hubs capable of producing both ESS and EV batteries. A key feature is enhanced manufacturing flexibility, allowing portions of production lines to be converted to ESS output in response to shifting EV market demand. The Lansing plant itself is an example of this strategy, having been reorganized into a hybrid hub producing both ESS and EV batteries after LG Energy Solution acquired GM’s stake in what was their third joint venture plant in February last year.

The Ultium Cells Tennessee plant invested approximately $70 million (around 99 billion won) to convert part of its existing EV battery production lines to ESS output, beginning ESS battery production in July. The Ohio plant, a joint venture with Honda, also commenced ESS battery production around the same time.

Securing Orders from Tesla, Toyota, and Google Projects

ESS LFP batteries produced at the Lansing plant will be supplied to power infrastructure and AI data center customers through Vertech, LG Energy Solution’s ESS system integration subsidiary. EV NCM batteries will be supplied to Toyota, with installation planned for the 2027 model year Highlander produced at Toyota’s Georgetown, Kentucky plant. LG Energy Solution and Toyota signed a battery supply agreement in 2023.

LG Energy Solution held approximately 140 GWh in ESS order backlog, primarily in North America, as of end-2024, and secured new contracts worth over 3 trillion won (approximately $2.1 billion) in the first half of this year alone. The Lansing plant has signed a supply contract with Tesla valued at approximately 6 trillion won (approximately $4.3 billion).

Orders continue to flow at other North American hubs as well. The Michigan Holland plant, which became the first facility in North America to begin mass production of large-scale ESS batteries in June last year, has confirmed supply agreements with Terra-Gen and Delta. The Ontario plant in Canada began ESS mass production in November last year and surpassed 1 million cells produced within just three months of operation.

In May, the company signed a 6 GWh ESS battery supply contract with DTE Energy, which is executing Oracle’s AI data center project. In July, it agreed to pursue ESS battery supply cooperation of up to 2.9 GWh with Cypress Creek Renewables, a U.S. independent renewable energy power producer, for a Google project.

Targeting 50 GWh North American LFP Capacity by Year-End

LG Energy Solution plans to secure over 50 GWh of ESS LFP battery production capacity in North America by the end of this year. The move is aimed at meeting surging local ESS demand driven by expanded investment in AI data centers and power grids.

According to market research firm Wood Mackenzie, the U.S. ESS market is projected to grow to approximately four times its current size by 2031, with new installations expected to reach 499 GWh.

CEO Kim Dong-myung said, “The launch of the Lansing plant is a critical milestone that will accelerate the growth of LG Energy Solution’s North American business. We will build a cutting-edge battery manufacturing network that supports the future of the U.S. mobility industry and energy infrastructure, strengthening the American battery ecosystem and expanding local production capabilities.”

Governor Whitmer said, “The Lansing plant is the result of Michigan’s investment efforts in clean energy, EV manufacturing, and energy storage. We look forward to continued cooperation in opening up Michigan’s future.” Secretary Burgum emphasized, “Domestic battery production in the United States is a key foundation for reducing foreign dependence, creating quality jobs, and strengthening America’s energy competitiveness.”

Meanwhile, including the Arizona Queen Creek cylindrical battery plant scheduled to begin operations within the year, all eight of LG Energy Solution’s North American production facilities will be in mass production by the end of this year. The Arizona plant will begin mass production of 46-series batteries in the fourth quarter, based on production lines with 50% improved equipment efficiency compared to existing facilities. The company plans to expand its 46-series customer base to include Mercedes-Benz and BMW, following Rivian and Chery Automobile.