LG Energy Solution Michigan Inc. plans to backfill electric vehicle battery production it expects to move to Lansing by manufacturing batteries for energy storage in Holland.
The company confirmed the shift in strategy in Holland, where LG has undergone a massive, $2.5 billion expansion to ramp up battery production.
The shift is driven by LG’s planned takeover of the Ultium Cells LLC battery plant outside Lansing, where the company had a joint venture with General Motors to produce electric vehicle batteries. GM has since exited the project to recoup its $1 billion investment, as EV demand has fallen short of projections.
LG Energy Solution planned to use the Holland plant to fill an order for Toyota Motor North America. It has been unclear until now how LG would use the Holland plant after it shifts production for Toyota to Lansing.
Phil Lienert, external affairs and government relations manager with LG Energy Solution, said last week that LG is currently in discussions with GM to acquire the Lansing-area facility.
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Once the acquisition is finalized and announced, LG Energy Solution Michigan “will operate as a production hub for (energy storage systems) production in North America,” he said.
Lienert declined to provide additional comment.
LG Energy Solution plans to acquire GM’s stake in the $2.5 billion Lansing-area Ultium Cells plant, which completed construction last year and still promises to create 1,360 new jobs, based on terms of a state incentives package that LG will now assume.
LG Energy Solution’s ESS Battery Division produces cells, packs and racks for a range of energy storage systems, spanning residential uses to grid-scale applications.
The energy storage systems market is increasingly attractive to LG Energy Solution given the slowdown and volatility in the EV market, according to its most recent quarterly earnings report. The company sees growing needs for energy storage as more intermittent renewable energy comes online, coupled with increased power demand from data centers, according to the fourth-quarter report showing annual revenue declined 24% year over year.
LG Energy Solution’s outlook for 2025 includes responding “proactively to local customer needs by converting production lines between EV and (energy storage systems),” according to a presentation on the fourth-quarter earnings.
The Seoul, South Korea-based LG Energy Solution also has benefited from federal Inflation Reduction Act tax credits that helped shrink the company’s fourth-quarter operating loss from the equivalent of approximately $423.5 million to about $265.1 million.
Those Biden-era tax credits face uncertainty with the GOP-led Congress and the Trump administration, despite the majority of investments under the law benefiting Republican congressional districts.
Laura Sherman, president of the Michigan Energy Innovation Business Council, said LG Energy Solution’s plan comes amid a flurry of uncertainty caused by tariffs and the rollback of clean energy production and investment tax credits.
“The investment tax credit for energy storage has been really important, as well as manufacturing tax credits,” Sherman said.
“There is a global market for electric vehicles and for batteries for these storage components,” Sherman added. “That will continue. The real question is what role does Michigan play? If these jobs are going to be created, components will be created and there’s strong benefits to doing it here.”
Last month, executives from 42 companies in Michigan wrote a letter to the state’s congressional delegation calling for the protection of a suite of clean energy-related federal tax credits.
“These credits have helped us stay competitive in a rapidly evolving national and global market, where states and countries are making major investments to support automotive manufacturing, advanced energy, energy efficiency, and critical grid services,” the companies wrote. “They have also expanded opportunities for our customers, helping them save money on powering and heating their homes and businesses, as well as on fuel costs.”
Lakeshore Advantage Corp., the economic development agency for Ottawa and Allegan counties, welcomed LG’s continued investment in Holland, where the company first built its battery plant in 2009.
“Their expanded investment in Lansing is another strong vote of confidence in Michigan’s talent and manufacturing strength,” Jennifer Owens, president of economic development agency Lakeshore Advantage Corp, said in an emailed statement. “LG’s commitment to Michigan is clear and will have positive implications for our state’s economy. We’re proud to support LG Energy Solution’s leadership in energy storage and battery production — an industry that is shaping the future of mobility and clean energy.”
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