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A view of LG Energy Solution’s Holland plant in Michigan. / Source: LG Energy Solution

LG Energy Solution has begun large-scale production of lithium iron phosphate (LFP) batteries for energy storage systems (ESS) in North America. The company is currently the only global battery manufacturer with an established large-scale ESS production system in the region—an advantage that industry experts say is timely given surging demand from sectors like AI data centers and renewable energy.

On June 1, LG Energy Solution announced it had started mass production of ESS-dedicated LFP batteries at its Holland plant in Michigan.

The batteries, based on long-cell pouch-type designs, offer superior energy efficiency, safety, and cost competitiveness. Supply agreements have already been secured with major clients, including Terra-Gen and Delta.

Originally, the company had planned to launch ESS battery production at a new plant in Arizona starting in 2026. However, by repurposing and optimizing space at its existing Michigan plant—previously dedicated to EV batteries—LG Energy Solution accelerated its timeline and began production ahead of schedule. Additionally, these U.S.-made batteries are exempt from tariffs, giving the company a price edge over competitors.

The move to speed up the transition came amid a plateau in global electric vehicle demand. In response, LG Energy Solution is diversifying its business model—investing in next-generation technologies such as solid-state and lithium-sulfur batteries—while expanding its ESS portfolio.

According to market research firm SNE Research, the global lithium-ion battery ESS market is projected to grow more than sixfold from about 185 GWh in 2023 to 1,232 GWh in 2035. In North America, the market is expected to nearly double, from about 97 GWh this year to 178 GWh by 2030.

The company recently signed an agreement to supply batteries for OCI Holdings’ North American ESS project and is also expanding its presence in Europe’s fast-growing residential and commercial ESS markets.

At the “Path of Oil, Chemicals, and Batteries” forum held in Seoul on May 21, Kang Yong-mook, a professor of materials science and engineering at Korea University, commented, “LFP batteries offer high safety and are well-suited for national grid applications. Their use is expected to grow rapidly.” He added, “LG Energy Solution is currently in the strongest position, with multiple U.S. plants already supplying large-scale state projects—successfully overcoming market challenges.”