LG Energy Solution plans to start mass production of lithium iron phosphate (LFP) batteries for energy storage systems (ESS) in the United States in the second half of 2025. The project is backed by a 1.4-billion-US-dollar loan guarantee to finance the expansion of the companyʼs Michigan facility. This represents LG Energy Solutionʼs first ESS production in the United States.
Batteries in pouch cell format
Originally designed to produce batteries for electric vehicles, the Michigan plant will be expanded to include a production line for ESS batteries. The company did not disclose production capacity, but industry estimates are around 17 gigawatt-hours per year. The batteries will be produced in a pouch cell format. LG Energy Solution also plans to offer cloud-based software for monitoring and analyzing ESS performance.
Reaction to rising US tariffs
The expansion is LG Energy Solutionʼs response to increasing US tariffs on Chinese ESS batteries, which are expected to rise to around 38.4 percent by 2026. Chinese manufacturers such as CATL, BYD, and EVE dominated the global ESS sector with an 86-percent market share in 2023.
