[BODY]
LG Energy Solution has begun producing lithium iron phosphate (LFP) batteries for energy storage systems (ESS) at Ultium Cells, its joint venture with General Motors. LG Energy Solution plans to aggressively target local ESS demand as it brings four of its five North American ESS bases into operation.
Ultium Cells announced on July 7 (local time) that it had begun producing LFP cells for ESS at its Tennessee plant.
This comes four months after Ultium Cells announced its plan in March this year to produce LFP products for ESS. At the time, Ultium Cells said it would convert part of its existing electric vehicle battery production line into an ESS battery production line through an equipment conversion investment of about $70 million.
The ESS batteries produced at the Tennessee plant will be supplied through Vertech, LG Energy Solution's (373220) North American ESS system integration (SI) subsidiary. Going forward, they will be used in various fields, including North American power grid stabilization projects, renewable energy-linked ESS facilities, and power infrastructure for AI data centers. Products manufactured at the Tennessee plant meet the "U.S.-made manufacturing requirements" under the U.S. government's Inflation Reduction Act (IRA) and other regulations.
Park In-jae, head of Ultium Cells, said, "The start of LFP production for ESS at the Tennessee plant is evidence of our expanded production capacity," adding, "Based on LG Energy Solution's advanced battery technology and the dedication of Tennessee employees, we have successfully established an ESS production system in all respects, including safety and productivity."
With mass production at the Ultium Cells Tennessee plant, LG Energy Solution has now begun operations at four of its "five major North American ESS complex manufacturing bases." Following the Holland plant in Michigan, which began mass production of ESS batteries in June last year for the first time in North America, it began producing ESS products at NextStar Energy in Canada in November last year.
On the 2nd of this month, it also began production at its Honda joint venture plant in Ohio, and the Lansing plant in Michigan is targeting the start of mass production within the year. LG Energy Solution plans to secure production capacity of more than 50 GWh in North America alone by the end of the year.
Building on its secured production capacity, LG Energy Solution plans to further accelerate the expansion of new ESS orders. In North America alone, LG Energy Solution has signed a series of supply contracts with global customers including Tesla, Terra-Gen, Excelsior Energy Capital, EG4, and Hanwha Q Cells. In May, it also signed a contract to supply a total of 6 GWh of ESS batteries with DTE Energy, which carries out projects such as the AI data center of global big tech firm Oracle.
