LG Energy Solution Scales Up ESS Business...Expands Global Production Network

Positioning ESS as a Next-Generation Growth Engine Amid EV Slowdown
Accelerating Strategy to Expand Global Production and Orders
Strengthening North America-Centered ESS Production and Supply System

LG Energy Solution is clearly positioning its energy storage system (ESS) business as a next-generation growth engine, simultaneously expanding both production and orders. As demand for ESS gradually emerges amid a slowdown in the electric vehicle (EV) market, the company is shifting the center of gravity of its business toward local production bases and turnkey solution capabilities.

Status of LG Energy Solution's North American energy storage system (ESS) production plants. Provided by LG Energy Solution

According to LG Energy Solution on February 8, 2026, the company views 2026 as a structural transition point at which the slowdown in EV market growth and the expansion of ESS demand will occur at the same time, and is pursuing a mid- to long-term growth strategy centered on the ESS business. Its cumulative ESS order backlog currently stands at around 140 GWh, and it aims to increase ESS revenue in 2026 to more than three times last year’s level. It has also set a target for new orders to exceed 90 GWh, which was an all-time high last year. In line with this, ESS production capacity will be expanded to 60 GWh on a global basis, with more than 50 GWh of that to be secured in North America.

ESS production bases are being expanded sequentially, with a focus on North America. The Holland plant in Michigan, United States, will begin operations in June 2025 and will serve as North America’s first large-scale ESS mass-production plant. The Lansing plant in Michigan and the joint plant with Honda in Ohio will start operations during 2026, and some EV production lines there will be converted for ESS use. NextStar Energy in Ontario, Canada, will begin operations in November 2025 and will be incorporated as a subsidiary of LG Energy Solution in February 2026.

ESS production systems are also being established outside North America. In Europe, the Wroclaw plant in Poland is scheduled to begin ESS production in November 2025, while the Nanjing plant in China has been producing LG Energy Solution’s first LFP-based ESS products since the end of 2023. In Korea, the Ochang Energy Plant is scheduled to begin ESS production in 2027.

On the order side, long-term contracts are continuing. LG Energy Solution has signed a 4.8 GWh ESS supply contract with the U.S. subsidiary of Hanwha Solutions’ Qcells division for the period from 2024 to 2026, and has entered into a contract of up to 8 GWh with U.S. renewable energy company Terra-Gen for the period from 2026 to 2029. It has also signed a 7.5 GWh supply contract with Excelsior Energy Capital starting in 2026, and a 1 GWh contract with Polish state-owned utility PGE starting in 2026. In addition, it is expanding its order pipeline by securing residential ESS supply contracts with Delta Electronics, EG4 Electronics, and others.

In terms of product competitiveness, the safety of its LFP-based products and its local production capabilities stand out. LG Energy Solution’s ESS products use LFP, which offers high thermal stability, and meet UL 9540A, the global standard for evaluating thermal runaway fire propagation. They are designed so that external coolant or natural ventilation alone can provide adequate response, and they have passed large-scale fire simulation tests required by the National Fire Protection Association standard NFPA 855 and the International Fire Code (IFC) without propagation to adjacent containers.

LG Energy Solution is also one of the companies producing ESS batteries in North America, thereby meeting the U.S.-origin requirements of the U.S. Inflation Reduction Act (IRA). It has established a dedicated organization to oversee the North American ESS business, building a system that manages the entire process from development and production to delivery to customers. Another key feature is that, through its global production bases in Europe, China, and Korea, the company has established a large-scale LFP mass-production system that is non-Chinese in ownership.

In addition, through its subsidiary LG Energy Solution Vertech, established in 2022, the company provides turnkey solutions that cover everything from battery manufacturing to system integration (SI). Under a single contract, it can offer an integrated package that includes systems, warranties, services, and software, which it says significantly enhances responsiveness to customer needs.

In his New Year’s address, LG Energy Solution President Kim Dongmyung stated, “To realize the growth potential of the ESS business, we will accelerate the ESS transition in key regions such as North America, Europe, and China, while simultaneously enhancing supply stability and operational efficiency.” He reaffirmed this direction during the fourth-quarter earnings conference call last year, emphasizing that the company will pursue growth in the ESS business in parallel with strengthening the qualitative competitiveness of its EV business.

In a recent message to employees, Kim also noted, “In this so-called value shift phase, where market standards and growth values are being reshaped, there are only a limited number of companies that simultaneously possess North American production facilities, operational experience, and SI-based turnkey solution capabilities.”

This content was produced with the assistance of AI translation services.