Ultium Cells LLC, a battery joint venture between South Korea’s LG Energy Solution Ltd. and General Motors Co., will upgrade its battery cell manufacturing facility in Spring Hill, Tennessee, to produce low-cost lithium iron phosphate (LFP) battery cells.
Conversion of battery cell lines at Spring Hill will begin later this year, with commercial production anticipated by late 2027, the company said in a statement.
The facility currently makes high-nickel cobalt manganese aluminum (NCMA) pouch cells for pricier, high-end electric vehicles.
The project, building on a $2.3 billion joint investment announced in 2021, marks the Korean battery maker’s first LFP facility on US soil amid the increasing adoption of LFP cells for affordable, low-end EVs globally.
(Graphics by Daeun Lee) Financial terms of the conversion weren’t disclosed.
“The upgrade reflects the continued strength of our partnership with General Motors and our shared commitment to advancing EV battery innovation,” said Suh Won-joon, executive vice president and head of the Advanced Automotive Battery division at LG Energy Solution.
MOUNTING PRESSURE TO CUT COSTS
Requested by US partner GM, LG Energy is ramping up facilities for low-cost LFP batteries amid a slower-than-expected market transition toward electrification, known as the EV chasm.
Ultium Cells in Spring Hill, Tennessee (Courtesy of GM) By swapping out NCMA or high-nickel cobalt manganese (NCM) batteries for more affordable LFP cells in several of its mid-range models, GM aims to make EVs accessible to a broader customer base – a strategy analysts said could redefine the market’s structure into a two-tiered system: LFP for mass-market vehicles and NCMA or NCM for premium offerings.
“At GM, we’re innovating battery technology to deliver the best mix of range, performance and affordability to our EV customers,” said Kurt Kelty, vice president of batteries, propulsion and sustainability at GM.
The Detroit automaker plans to equip five out of its seven EV models, including the Chevrolet Bolt, Equinox, Blazer and Silverado EV, with LFP batteries.
Only luxury models such as the GMC Hummer EV and Cadillac Lyriq will continue to use high-performance NCM, or NCMA, batteries, sources said.
Comparison of NMC and LFP batteries According to industry estimates, switching from NCM to LFP could cut battery costs by 20–30%, lowering the per-vehicle cost by at least $6,000.
GM’s rivals, such as Ford Motor and Stellantis, are also preparing LFP-compatible vehicles.
GM said on Monday that the Ultium Cells plant in Warren, Ohio, will continue producing cells with NCMA chemistry, which enables more than 300 miles of range on a charge.
LMR BATTERIES
The decision to scale LFP battery production in the US is also a critical step toward reducing reliance on imports, particularly from China, which dominates the global LFP market.
Energy storage systems (ESS) for supply to Excelsior (Courtesy of LG Energy Solution) China’s Contemporary Amperex Technology Co. Ltd. (CATL) and BYD Co. are the world’s two largest LFP battery makers.
In a longer-term bet, LG and GM are also developing lithium manganese-rich (LMR) batteries – an emerging format that retains LFP’s cost advantages while promising superior performance.
If the current R&D proves successful, the partners plan to integrate their LMR production lines at existing US sites by 2028, sources said.
GM has said it aims to become the first company to produce LMR prismatic battery cells at commercial scale.
Cadillac Lyriq EV (Courtesy of GM) BATTERY ESS DEAL IN NEW MEXICO
Meanwhile, DESRI, a US renewable energy supplier, said on Monday it has begun construction on the Santa Teresa Solar and Storage project in Doña Ana County, New Mexico, for El Paso Electric (EPE).
The 150-MW solar, 600-MWh storage project is the second project DESRI is working on for EPE.
Santa Teresa, DESRI’s second project for EPE, is a 150-megawatt solar facility with a 600 megawatt-hour battery energy storage system (BESS).
LG’s US ESS affiliate, LG Energy Solution Vertech, will provide the US-made BESS.
“We're proud to be a part of a project that supports the community by adding clean energy technology to the electric grid, and to do so using US-made battery systems," said Park Jae-hong, chief executive of LG Energy Solution Vertech.
Korea’s battery trio – LG, Samsung SDI Co. and SK On Co. – have shifted gears in recent years to manufacture LFP batteries for electric vehicles and energy storage systems.
Write to In-Soo Nam at isnam@hankyung.com Jennifer Nicholson-Breen edited this article.
