LG Energy Solution has begun producing lithium iron phosphate (LFP) battery cells at its massive plant in Lansing, Michigan, to supply Tesla’s energy storage systems, as the company redirects part of its more-than-$2 billion facility toward the rapidly growing energy storage market.
The facility covers 2.8 million square feet within a 226-acre site. It was originally planned as a joint venture between LG Energy Solution and General Motors under the name Ultium Cells to produce electric vehicle batteries. But GM sold its stake in the plant last year after federal incentives for electric vehicles expired and sales growth slowed, making LG Energy Solution the sole owner.
From Automotive Batteries to Energy Storage Systems
The plant began producing pouch-type LFP cells under a $4.3 billion supply agreement signed by LG Energy Solution and Tesla last year. The plant will also supply batteries for DTE Energy’s energy storage systems in Michigan. At the same time, LG Energy Solution continues to produce nickel-manganese-cobalt (NMC) cells at the site for the upcoming electric Toyota Highlander, with the possibility of supplying batteries to other automakers in the future. The report said these cells may also be used in the Subaru Getaway and Lexus TZ, two models mechanically related to the Toyota Highlander, according to the source.
LG Energy Solution expects its North American energy storage unit, LGES Vertech, to become profitable by the fourth quarter of this year. This comes as artificial intelligence data centers expand and utilities and renewable energy projects increasingly rely on batteries to stabilize electricity supplies.
Why Does This Shift Matter?
The Lansing plant offers a practical example of how electric vehicle battery facilities can be repurposed when demand growth does not meet expectations. According to figures cited by LG Energy Solution from Wood Mackenzie, the United States added about 25 gigawatt-hours of energy storage capacity over the past decade, while it added 100 gigawatt-hours this year alone. The average project size has also increased from about 10 megawatt-hours to 1,000 megawatt-hours.
The shift is not limited to changing the final product. Robert Lee, president of LG Energy Solution in North America, said that moving from automotive battery production to LFP requires new equipment and validation processes because the coating layer in LFP cells is thicker and some manufacturing steps differ. Although LFP and NMC cells share basic manufacturing principles, differences in chemistry require adjustments to production settings, equipment and quality controls.
What Is Happening Inside the Production Line?
Coating, roll pressing, drying, forming and degassing are carried out in a highly clean and automated environment. The facility uses robots and automated guided vehicles to move materials, while workers oversee the operations. After the pouch-type LFP cells are manufactured in Michigan, they are transported to LG Energy Solution’s plant in Holland, Michigan, for assembly into integrated storage systems. Although the cells are manufactured entirely in the United States, the raw materials come from countries including China and Indonesia.
Upcoming Battery Technologies
LG Energy Solution is working with General Motors on lithium-manganese-rich (LMR) batteries, which use smaller amounts of nickel and cobalt. GM has said it will use them in large trucks and sport utility vehicles beginning in 2028, with a range exceeding 400 miles and a cost approaching that of lower-priced LFP batteries.
The company is also developing 46-series lithium-ion cells for production at its upcoming plant in Arizona. It considers them better suited to vehicles with structural battery packs, with the potential to achieve 10-minute charging and improved safety in the future. LGES Vertech is preparing a pilot program for sodium-ion cells for energy storage systems, while the company believes that barriers to large-scale production continue to delay the use of solid-state batteries in electric vehicles. According to Robert Lee, the technology may reach specialized applications and smartphones before being used widely in vehicles.