LG Energy Solution has begun mass production of lithium iron phosphate (LFP) batteries for energy storage systems (ESS) at its Holland, Michigan, facility. The move is designed to strengthen local production capabilities in North America, ensuring a stable battery supply for major clients, mitigating the impact of U.S. tariffs and enhancing cost competitiveness.
According to LG Energy Solution, it is currently the only battery manufacturer mass-producing LFP cells specifically for ESS applications in the region. The Holland plant is producing long-cell pouch-type batteries, noted for their energy efficiency, safety and competitive pricing. LG Energy Solution Vertech, a fully owned U.S.-based ESS system integrator, has already secured agreements to supply these LFP batteries to customers including Terra-Gen and Delta Electronics.
This production rollout represents a key milestone in the company’s strategic rebalancing initiative, which focuses on improving investment efficiency and reducing unnecessary costs amid a temporary slowdown in the global electric vehicle (EV) market and evolving political conditions such as tariffs.
Originally, LG Energy Solution planned to start LFP battery production for ESS at a new Arizona plant in 2026. To accelerate its roadmap, it repurposed EV battery lines at the Holland site and optimized related facilities. This approach allows faster response to rising ESS demand in industries like AI-driven data centers and renewable energy.
Industry research firm SNE Research projects the global lithium-ion battery ESS market will grow from 185 gigawatt-hours (GWh) in 2023 to 618 GWh by 2035, a compound annual growth rate of 10.6%. The market’s value is expected to reach approximately $80 billion by that year.
LG Energy Solution has also highlighted the role of increasing data center capacity for AI and the expansion of renewable energy in driving ESS demand. The company forecasts more than a fivefold increase in ESS requirements over the next decade.
“We are currently engaging in talks with various clients in the North American region about supplying ESS batteries,” said an LG Energy Solution official. “We will continue to deliver value to customers based on our top-class technology and quick responses in local markets.”
Source: The Korea Herald
