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The U.S. battery supply chain just got a little stronger.
LG Energy Solution, a division of the major Korean battery manufacturer, is now producing battery cells for grid-scale energy storage at a site in Holland, Michigan. The company spent $1.4 billion to expand the factory, which previously made electric vehicle batteries. At full capacity, the new lines will produce 16.5 gigawatt-hours of lithium iron phosphate cells per year.
“That’s a sizable portion of annual domestic demand for energy storage battery cells,” said Noah Roberts, vice president for energy storage at the American Clean Power Association trade group, who toured the LG factory Tuesday. “It’s a testament and demonstration of the industry’s commitment to onshoring manufacturing and ramping it up in short order.”
The lithium iron phosphate chemistry, often abbreviated as LFP, has grown increasingly popular for stationary storage and EVs; it offers fire-safety benefits, durability, and lower costs compared to the typical electric vehicle chemistries, at the expense of some energy density. Until now, American battery customers had to turn to China for any LFP supplies. LG’s facility appears to be the largest giga-scale LFP production in the U.S. Japan’s AESC recently launched LFP production at its factory in Smyrna, Tennessee, and Tesla is working to onshore LFP production as well.
As such, LG’s investment is strengthening the U.S. clean energy supply chain at a time of great precariousness, when several other would-be battery manufacturers have failed to deliver.
The plan originated as a way to bolster local supply chains, before Congress passed concerted battery manufacturing incentives, said Jaehong Park, CEO and president of LG Energy Solution Vertech, which focuses on stationary grid storage. But when the Inflation Reduction Act of 2022 created incentives for manufacturing and grid storage deployment, LG upped its planned capacity from 4 gigawatt-hours to the eventual 16.5.
The company initially intended to install these manufacturing lines in Arizona, but relocated them to a portion of its Holland facility that had been developed to expand EV battery production, which LG has done there since 2012. By shifting the LFP equipment to the space in Holland, LG could open commercial production a full year earlier than originally planned, noted Tristan Doherty, chief product officer at the storage division.
Now the Holland manufacturing space covers the area of 42 football fields, and will employ 1,700 people when fully staffed.
“It is very clearly a state-of-the-art facility with the most advanced manufacturing that you can have in the United States,” Roberts said.
The LFP products are booked up six months out, and LG is already looking at doubling the production capacity next year, Park said.
Manufacturers took a gamble in betting that the U.S. could reshore the battery production that China has cornered with dedicated industrial policy over the last decade or more. Companies need to build new industrial hubs and train American workers, and then try to match the quality and consistency of the incumbent industry in China.
The Biden administration passed several incentives to reduce the cost premium for “Made in the USA” batteries, including tax credits for purchasing electric vehicles with domestic batteries, and bonus credits for grid storage developers who buy domestic content.
But the current Republican majority in Congress is working to eliminate those policies, to save money for much more costly deficit spending in President Donald Trump’s signature policy bill. Companies like LG that greenlit multibillion-dollar factory investments under one tax credit regime no longer know which rules will apply when they start production.
Doherty acknowledged there’s a great deal of uncertainty at the moment, but said he’s confident in the long-term bet on U.S. battery production.
“It’s clear that the industry is here and it’s here to stay — the question is just what it looks like and what are the nuances to make it work,” he said. “There’s a lot of very big deals that are in the works. Everyone understands, you need to get U.S. battery supply in your supply chain as quickly as possible.”
Trump’s massive tariffs on China could in theory support domestic producers. But the president has changed his tariff plans from week to week, denying would-be manufacturers the stable business environment they like to see before committing billions of dollars to a yearslong endeavor. Blanket tariffs on China also inflate the cost of battery materials, which are almost entirely processed in that country, as well as the cost of battery manufacturing equipment, which also largely originates there.
LG, as a South Korea-based conglomerate, has been able to avoid the negative scrutiny that American politicians have increasingly leveled at Chinese clean energy manufacturers. LG now sources its battery materials for Holland from outside China, and its manufacturing equipment came from Korea and Japan, Park said.
When Trump came into office, the U.S. was on track to achieve self-sufficiency in battery cell production, per a 2024 analysis by Argonne National Laboratory. The U.S. could make 74 gigawatt-hours of lithium-ion battery cells in 2023, but was set to grow that to 1,133 gigawatt-hours by 2030, comfortably more than expected demand.
During Trump’s tenure, though, new manufacturing investments have plummeted compared to the Biden years, and project cancellations surged to nearly $8 billion in the first quarter of 2025. In that time, for instance, Freyr Battery canceled a planned battery factory in Georgia (and later rebranded itself as T1 Energy), and Kore Power axed a lithium-ion factory slated for Arizona.
Elsewhere in Michigan, startup Our Next Energy has been laboring to build the first large LFP factory in the U.S. But it has yet to secure the funding necessary to fill out the cavernous building it acquired west of Detroit, and the company is struggling to stay afloat.
T1 Energy, Kore Power, and Our Next Energy share something in common: They are venture capital-backed startups attempting to compete with the incumbents of the global battery industry. That model hasn’t produced a standout success yet — even Tesla initially tapped an incumbent, Panasonic, to make EV batteries at its Nevada Gigafactory.
The achievement at Holland looks rather modest compared to LG Energy Solution’s global portfolio, which Doherty said has reached around 500 gigawatt-hours of annual battery production.
“As a big company with a big balance sheet, we can have the confidence to say we’ll weather this storm,” Doherty said. “We’ll make it to the other end because we see where this is going.”
LG’s customers may have more difficulty riding out the turbulence of constantly changing tariffs and tax policy.
“This is a market that is growing, and any disruption that causes it to contract is something that will harm manufacturing,” Roberts said of the grid storage construction sector.
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