LG Energy Solution is considering supplying the U.S. government and major defense contractors with batteries for drones and other unmanned weapons systems, to capture growing demand for military hardware as demand from electric vehicles sputters.<\/p>\n
The South Korean battery-maker has received inquiries from multiple potential American partners about defense opportunities, Bob Lee, the company\u2019s president for North America, said in an interview.<\/p>\n
Although discussions are in their early stages, expanding into defense would mark a significant strategic shift for the LG group, which has historically avoided the sector.\u00a0<\/p>\n
It also highlights a broader move into defense by commercial companies as the administration of U.S. President Donald Trump pushes to replenish munitions used in the Iran and Ukraine wars, and strengthen domestic supply chains for drones and other strategic technologies.<\/p>\n
\u201cDefense is a very big source of funding and business opportunities right now, so we are getting some inquiries,\u201d Lee said. \u201cWe\u2019re being very careful in terms of how we manage that.\u201d<\/p>\n
Lee likened LG\u2019s past stance on defense to consumer companies deciding not to get into alcohol or tobacco. But now, \u201cwe definitely see growth and opportunities,\u201d he said.<\/p>\n
LG Energy shares rose as much as 2.6% in Seoul on Wednesday, while the nation\u2019s benchmark Kospi index fell.<\/p>\n
The pivot comes as LG Energy reorients its business in North America after an expected jump in EV adoption failed to materialize. Energy storage is now the majority of its U.S. business, while EV batteries dominate outside the U.S., Lee said.<\/p>\n
The company is quickly expanding in the energy storage market where demand for infrastructure upgrades and from artificial intelligence data centers is surging. It has repurposed five of its eight plants in the region initially built to support EVs for the energy storage market. Lee said the company expects that business to be profitable by the end of the year.<\/p>\n
On Tuesday, LG hosted a ceremony to mark the opening of a Lansing, Michigan, battery plant built through a partnership with General Motors (GM). The site will now supply about $4.3 billion worth of lithium-iron-phosphate cells for Tesla\u2019s Megapack energy storage systems starting in 2027.<\/p>\n
LG\u2019s Lansing plant will also produce nickel-based battery cells for Toyota Motor vehicles, after transferring a $1.5 billion order from another LG plant in Holland, Michigan. That site in turn will manufacture energy storage cells for Michigan utility DTE Energy.<\/p>\n
The Lansing plant\u2019s annual capacity is expected to reach 35 gigawatt-hours by the end of next year.<\/p>\n
LG\u2019s expansion of its U.S. manufacturing footprint comes amid new tensions between the U.S. and South Korean governments over trade and security.\u00a0<\/p>\n
Trump has scaled back military exercises planned with South Korea while praising North Korean leader Kim Jong Un. Trump administration officials have also complained that Seoul is slow-walking a pledge to invest $350 billion into the U.S.<\/p>\n
Still, South Korean companies continue to win orders from America, with the U.S. Army selecting a unit of Hanwha Aerospace to provide the new Mobile Tactical Cannon. The deal, worth up to $262 million, could eventually turn into a larger contract to replace the Army\u2019s aging M777 towed howitzers.<\/p>\n
The Trump administration last week announced tariffs of as much as 100% on imported drones and their components, a move that could speed a U.S. decoupling of drone supply chains from China.<\/p>\n
China is also a major competitor in energy-storage batteries. LG\u2019s Lee said he urged U.S. Interior Secretary Doug Burgum, who attended Tuesday\u2019s event in Lansing, to consider measures that would restrict Chinese access to the energy storage market.<\/p>\n
\u201cIt\u2019s very important for us to become more independent and be self-reliant,\u201d Lee said. \u201cHe was very much on board.\u201d<\/p>\n
South Korea\u2019s battery-makers have been repurposing factory capacity for grid storage after North American carmakers dialed back EV plans and unwound joint ventures.<\/p>\n
Samsung SDI is acquiring GM\u2019s stake in an Indiana venture and converting the facility for energy storage production. SK On, the battery unit of SK Innovation, will operate a Tennessee plant for stationary battery output that it had developed through a now-defunct partnership with Ford Motor.<\/p>\n
Michael Sanders, senior adviser at research firm Avicenne Energy, said there is \u201cvery limited chance\u201d of excess capacity in the U.S. battery market through 2035 or 2040.<\/p>\n
\u201cThe big question is how long the data center hype will live on,\u201d Sanders said in an email. \u201cBut between ESS and EV demand, even if it loses a little luster we don\u2019t need to worry about oversupply.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"LG Energy Solution is considering supplying the U.S. government and major defense contractors with batteries for drones and…\n","protected":false},"author":2,"featured_media":124777,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[3801,3718,1576,315,747,733,33,3343],"class_list":["post-124776","post","type-post","status-publish","format-standard","has-post-thumbnail","category-lg-energy-solution","tag-batteries","tag-drones","tag-energy","tag-lg","tag-lg-energy","tag-lg-energy-solution","tag-south-korea","tag-u-s"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/124776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=124776"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/124776\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/124777"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=124776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=124776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=124776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}