LG Energy Solution opens Lansing factory, completing 5-hub North America ESS network

LG Energy Solution has begun full operations at its factory in Lansing, Michigan, completing a five-hub production network aimed at capturing the North American energy storage system (ESS) market. The company has transformed what was originally an electric vehicle (EV)-focused facility into a combined manufacturing base capable of producing both ESS and EV batteries, with plans to accelerate new order wins on the strength of its local production capacity.

LG Energy Solution said it held an opening ceremony for the Michigan Lansing factory on Tuesday (local time) in Lansing, Michigan. Attendees included Michigan Governor Gretchen Whitmer, US Secretary of the Interior Doug Burgum, Republican Rep. Tom Barrett, Consul General in Chicago Hong Sang-woo, and LG Energy Solution CEO Kim Dong-myung.

The Lansing plant is the seventh factory LG Energy Solution operates in North America. It will function as a combined manufacturing hub with an annual production capacity of more than 35GWh, producing both lithium iron phosphate (LFP) batteries for ESS and nickel-cobalt-manganese (NCM) batteries for electric vehicles. Once the cylindrical battery factory in Queen Creek, Arizona — slated to begin operations later this year — comes online, all eight of LG Energy Solution's North American production facilities will be in mass production by year's end.

The Lansing plant's launch completes LG Energy Solution's five-hub ESS production network in North America. The company now produces ESS batteries across three wholly owned factories — the Michigan Lansing plant, the Michigan Holland plant and the NextStar Energy plant in Ontario, Canada — and two joint-venture facilities: the L-H Battery Company plant in Ohio, a joint venture with Honda, and the Ultium Cells plant in Tennessee, a joint venture with GM.

All five facilities are combined manufacturing hubs capable of producing both ESS and EV batteries. Their defining feature is manufacturing flexibility: production lines can be partially shifted to ESS output in response to changes in EV market demand and automakers' electrification strategies.

The Lansing factory is a prime example of this production rebalancing strategy. LG Energy Solution acquired the plant in February last year — originally GM's third joint-venture factory — to improve investment efficiency in North America, then converted it into a combined hub for ESS and EV battery production.

Order momentum is building as well. ESS products made at the Lansing plant will be supplied to key power infrastructure customers and AI data center clients through Vertec, LG Energy Solution's ESS systems integration subsidiary. As of late last year, the company held an ESS order backlog of approximately 140GWh, centered on North America, and secured more than 3 trillion won ($2.12 billion) in new supply contracts in the first half of this year alone.

The Lansing plant has already locked in supply contracts worth about 6 trillion won with Tesla, among others. EV batteries produced there will also go to Toyota, destined for vehicles including the 2027 Toyota Highlander assembled at Toyota's Georgetown, Kentucky plant. LG Energy Solution and Toyota signed a battery supply agreement in 2023.

Production stabilization and order growth are advancing in parallel at the other North American ESS hubs. The Michigan Holland plant became the first facility in North America to begin large-scale ESS battery mass production, in June last year, and has since confirmed supply agreements with customers including Terragen and Delta. The Ontario, Canada plant, which started ESS mass production in November last year, surpassed 1 million cells produced within three months of coming online.

The L-H Battery Company plant in Ohio and the Ultium Cells plant in Tennessee both began ESS battery production in July. The Tennessee plant invested approximately $70 million to convert part of its existing EV battery production lines to ESS output.

LG Energy Solution plans to accelerate ESS order wins on the back of this expanded production base. According to industry sources, the company has signed a series of supply contracts with Tesla, Terragen, Excelsior Energy Capital, EG4 and Hanwha Qcells, among others. In May, it signed a 6GWh ESS battery supply agreement with DTE Energy for an Oracle AI data center project. In July, it agreed to pursue ESS battery supply cooperation of up to 2.9GWh with Cypress Creek Renewables for a Google project.

The company is also positioning itself to meet growing EV demand. The Arizona cylindrical battery plant will begin mass production of its 46-series batteries in the fourth quarter of this year, using production lines with 50 percent improved equipment efficiency compared with previous generations. LG Energy Solution plans to expand its 46-series customer base beyond Rivian and Chery Automobile to include Mercedes-Benz and BMW, while in Europe it aims to grow orders for mid- to low-cost products such as LFP and high-voltage mid-nickel batteries.

The company aims to secure more than 50GWh of LFP battery production capacity for ESS in North America by the end of this year, in order to meet surging local ESS demand driven by AI data center buildouts and grid investment. Market research firm Wood Mackenzie projects the US ESS market will grow roughly fourfold by 2031, with new installations reaching 499GWh.

"The launch of the Lansing factory is an important milestone that will accelerate the growth of LG Energy Solution's North American business," CEO Kim said. "We will build a cutting-edge battery manufacturing network to support the future of America's mobility industry and energy infrastructure, strengthening the US battery ecosystem and expanding our local production capabilities."