LG Energy Solution Halts Construction of US ESS Plant... Shifts to Electric Vehicle Production Line

LG Energy Solution halted construction of its battery factory for energy storage systems (ESS) in the United States just two months after breaking ground.

The company plans to adjust the pace of investment by converting production lines of electric vehicle batteries, which have seen reduced operating rates due to sluggish market conditions, to ESS batteries.

According to industry sources on the 28th, LG Energy Solution recently temporarily suspended construction of a pouch-type lithium iron phosphate (LFP) battery production plant for ESS in Queen Creek, Arizona. The plant was expected to have an annual production capacity of 17 gigawatt-hours (GWh).

At the same time, the construction of a medium-to-large cylindrical battery plant, which began simultaneously, will proceed as planned and is scheduled to start operations in 2026. This plant will have an annual capacity of 36 GWh. LG Energy Solution had initially invested 7.2 trillion won and started building the plant in April.

As the temporary slowdown in electric vehicle demand has prolonged, causing a sharp decline in battery demand and a drop in factory operating rates, LG Energy Solution has revised its management policy to limit new investments. The schedule for resuming construction is undecided.