LG Energy Solution is altering its manufacturing strategy in Michigan, pivoting from electric vehicle (EV) battery production to energy storage solutions. This change is largely due to LG's acquisition of the Ultium Cells LLC battery plant near Lansing from General Motors, following a decline in EV demand that led GM to withdraw from the joint venture.
Initially intended to fulfill a Toyota order, LG's Holland facility will now focus on energy storage systems (ESS). This shift leverages the existing $2.5 billion expansion at the Holland plant, transforming it into a North American production hub for ESS.
The decision is driven by the growing attractiveness of the energy storage market, especially in the face of EV market volatility and the increase in renewable energy sources. The Inflation Reduction Act's tax credits have also influenced LG's decision, though their future is uncertain under the current political climate. Michigan's economic development agencies view this continued investment by LG as positive for the state's economy.
Uncertainty around tariffs and clean energy tax credits has led businesses to advocate for their protection. Despite challenges, the global market for both EVs and energy storage batteries remains robust, raising the question of Michigan's ongoing role in this expanding sector.