South Korea’s top battery manufacturers—LG Energy Solution, Samsung SDI and SK On—are accelerating efforts to mass-produce lithium iron phosphate (LFP) batteries for energy storage systems (ESS) amid ongoing weakness in electric vehicle demand. Market research firm SNE Research projects that the global ESS market will expand from 235 gigawatt-hours in 2024 to 618 gigawatt-hours by 2035, a gain of more than 250 percent driven in part by the growth of AI data centers.
LG Energy Solution plans to begin LFP battery production for ESS at its Ochang, North Chungcheong facility in 2027. The company launched LFP manufacturing at its Nanjing plant in late 2023, expanded to Michigan in June and expects to start production in Wroclaw, Poland, early next year.
SK On will convert part of its SK Battery America plant in Georgia to LFP production in the second half of next year and install a dedicated 3-gigawatt-hour annual capacity line at its Seosan, South Chungcheong, plant. Samsung SDI aims to secure 30 gigawatt-hours of LFP capacity by converting lines at StarPlus Energy, its joint venture with Stellantis in the U.S., beginning in the fourth quarter of next year. The company targets mass production of LFP and mid-nickel prismatic batteries by 2028.
LFP batteries offer cost advantages and enhanced safety, and they now represent more than 90 percent of the global ESS market. Although ESS battery demand currently accounts for about 20 to 25 percent of EV battery demand, analysts note that ESS growth is steadier, supported by renewable energy expansion and grid-stabilization needs rather than economic cycles or subsidy policies.
Despite the relative ease of converting existing production lines, Korean firms must contend with Chinese manufacturers led by CATL, which holds over 30 percent of global ESS battery shipments. Geopolitical tensions and restrictions on certain foreign entities, however, position South Korea as the primary source outside China for large-scale LFP battery production. U.S. automakers are already broadening electric vehicle offerings with LFP options, reflecting a move toward diversified battery portfolios.
Source: Korea JoongAng Daily
