Korean battery giant LG Energy Solution’s gigafactory in Lansing, Michigan, is half a mile long and a quarter mile wide. Inside, the 2.8-million-square-foot facility has hallways illuminated by bright white lights that seem to stretch as far as the eye can see. The atmosphere feels clinical and slightly eerie, with robots doing most of the work, automated guided vehicles (AGVs) transporting raw materials around the plant, and humans supervising it all. They work together at the $2-billion-plus facility, quietly humming toward a cleaner future.
The factory sits on a 226-acre site and was originally planned as an Ultium Cells joint venture between LGES and General Motors to produce EV batteries. But after the end of federal EV tax credits and slower-than-expected EV sales growth, GM sold its stake in the facility last year, leaving LGES as the plant’s sole owner. The dissolution was part of a broader string of joint-venture breakups and restructurings that have rocked America’s EV industry, including those involving Ford and SK On, GM and Samsung SDI, and Stellantis and LGES. The entire industry is reeling from regulatory whiplash in the United States, which has pulled most government support for environmentally friendly projects.
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Source: LGES
Now, demand for battery energy storage systems (ESS) from AI data centers and utilities is breathing new life into the plant, cushioning the impact of sluggish EV demand. LGES is also among the first companies to bring lithium-iron-phosphate (LFP) battery production to the U.S. China dominates LFP technology and its commercialization, but battery makers are now working to bring more of that production stateside—where the chemistry was first developed in the 1990s.
While LGES’s EV business isn’t exactly hot at the moment, the company expects its North American ESS division, LGES Vertech, to become profitable by the fourth quarter of this year. That growth is being driven in large part by the rapid expansion of AI data centers and the growing use of ESS batteries across power grids and renewable energy projects.
Making Batteries For Tesla And Toyota
The Lansing plant has now started making LFP pouch cells for Tesla’s energy storage systems, part of a $4.3 billion supply deal the two companies inked last year. The plant will also supply ESS batteries for Michigan’s DTE Energy.
But LGES isn’t giving up on EV battery production. The company said it is also producing nickel-manganese-cobalt (NMC) cells at the facility for the upcoming all-electric Toyota Highlander and could supply batteries to more automakers in the future. It’s reasonable to assume that these cells could also power the mechanically related three-row Subaru Getaway and the more premium Lexus TZ.
Photo by: LGES
Robert Lee, LGES’s head of North America, said converting the plant from EV battery production to ESS wasn’t as simple as it might seem.
“It’s not easy,” Lee said during a media roundtable at the plant this week. “LFP coating is thicker and then there are slight differences in the manufacturing process, so you do need to put in some new equipment and validate them in order to build batteries.”
Still, LGES believes the investment is worth it given the rapidly growing demand for energy storage.
Citing research from Wood Mackenzie, LGES said the U.S. added about 25 gigawatt-hours of energy storage capacity over the past decade. This year alone, the country has added 100 GWh of ESS capacity, according to the company. The average project size has ballooned from roughly 10 megawatt-hours to 1,000 MWh, while the projects themselves are becoming safer, cheaper, and faster to integrate into power grids, renewable energy projects, and AI data centers.
“There’s a lot of great infrastructure upgrades that we need in this country,” Lee said. “20 years ago, we had something like twice the power generation of China. Today, they have two and a half times more power generation than the U.S. As a nation, we have to invest in our grid and energy infrastructure.”
Touring The LFP ESS Production Line
A battery factory is nothing like a traditional car factory that makes engines and body shells. There’s no cacophony of clunking metal or moving assembly line where workers bend and twist to install parts. It’s quieter than a car plant and heavily automated. There isn’t a speck of dust, and the plant is practically odorless.
Batteries are also extremely sensitive to contamination, which meant I had to wear a full white gown, glasses, hair net, and shoe covers. Then we were blasted with high-pressure air for decontamination and had to change our shoe covers three times between different sections of the plant.
Stickers were put on our phone cameras and devices. And LGES executives who had flown in from the company’s Korean headquarters kept a close eye on the journalists, making sure no one sneakily removed the stickers to snap pictures of sensitive IP during the production line tour.
(Some companies are even more paranoid about their IP. During a recent Jaguar Land Rover factory tour in England, they shared the program agenda via a smartphone app and then threw our phones in a locker for the duration of the program.)
Photo by: LGES
We then proceeded to look at some key LFP battery manufacturing processes like coating, calendering (roll pressing), drying, formation, and degassing. In simple terms, coating applies the battery’s cathode active material—which is a cake-batter-like wet slurry—to metal sheets, calendering compresses those layers to get to the right thickness, and drying removes moisture. Formation is when the cells are charged and discharged for the first time to activate them, while degassing removes gases that build up during that process.
LFP and NMC batteries use broadly the same basic cell manufacturing principles, but their cathode materials are made through different chemical processes. That difference requires some changes to manufacturing parameters and equipment and quality controls, even though the overall production line remains largely similar. The differences are more apparent upstream, since their supply chains are vastly different as LFP uses iron and phosphorus rather than nickel, manganese and cobalt.
The finished LFP pouch cells are slim, long and rectangular. They are stacked into containers and shipped to LGES’s other large battery factory in Holland, Michigan, where they are assembled into complete ESS systems. And although the LFP cells themselves are made entirely in the U.S., engineers said the raw materials come from countries including Indonesia and China.
What About Future Chemistries?
LGES said it’s working with General Motors to develop lithium-manganese-rich (LMR) batteries. These cells will use far less nickel and cobalt, which are expensive and environmentally damaging to mine, while relying more heavily on manganese, which can be processed in the U.S. GM has said LMR batteries will power its full-size trucks and SUVs from 2028 onward, delivering more than 400 miles of range while costing roughly the same as lower-cost LFP batteries.
But LGES is also working on other next-generation technologies, including more advanced lithium-ion batteries and sodium-ion cells, while keeping a close eye on solid-state battery development.
The company is gearing up to produce its new 46-series lithium-ion cells for EVs at its upcoming gigafactory in Arizona. LGES said these larger-format cells are better suited to next-generation EVs with structural battery packs, while further advancements could eventually enable 10-minute charging times and improve pack safety.
Photo by: LGES
“We just want to have all those options open,” Devon Wilson, the vice president of sales and marketing at LGES Vertech, said. “We continue to look at other chemistries [and] sodium that’s a big one for us,” he said, adding that the company is preparing a pilot program for sodium-ion batteries for energy storage systems. Chinese battery giant CATL has already raced ahead with the commercialization of sodium-ion batteries, but the U.S. is beginning to catch up, with General Motors also announcing plans to deploy sodium-ion ESS batteries by the end of the decade.
With respect to solid-state batteries for EVs, Lee said bottlenecks remain.
“The problem with solid state is large-scale production,” Lee said. “It has very good energy density, so if you’re making a small form factor, you should be able to get there. If you’re making very large form factors, most companies are struggling,” he added. Lee said EVs won’t be the first application for mass-market solid-state batteries.
“You will see that in your smartphones probably a decade before you would see it in EVs,” he added. “I would expect specialized applications first before we’re able to contemplate that as fit for EVs or even ESS.”
There’s also an unusual irony in all of this. Billions of dollars worth of clean energy projects, including several battery plants, were canceled over the past couple of years. That disruption also caused the bigger and more established battery makers to pivot and keep making batteries anyway. The ESS batteries will end up next to solar farms, outside AI data centers or on the power grid, helping build the very infrastructure that could power America’s next wave of electrification.
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