[Alpha Biz= Kim Jisun] LG Energy Solution (LGES) has been chosen as the battery production partner for General Motors (GM)’s low-cost lithium iron phosphate (LFP) batteries, which will be used in GM’s next-generation electric vehicles. This strategic partnership between South Korea’s LGES and America’s GM marks a significant push to challenge China’s dominance in the LFP battery market and is expected to help both companies accelerate the overcoming of the EV market's current demand plateau, often referred to as the “EV chasm.”



On July 14 (local time), Ultium Cells—LGES and GM’s battery joint venture—announced that it will produce LFP battery cells at its Spring Hill Plant 2 in Tennessee. The facility, which previously produced high-end nickel-cobalt-manganese (NCM) batteries, will be retooled to begin LFP cell production by late 2027. The transition will commence later this year.



Ultium Cells explained the decision as a response to growing diversification in consumer EV demand. Kurt Kelty, GM’s Vice President of Battery and Sustainability, said:



“Expanding LFP cell production in the U.S. enables us to broaden GM’s EV portfolio. It improves cost competitiveness and gives consumers more affordable EV options.”



The shift underscores the companies' intention to expand influence in a market traditionally led by China, which dominates in low-cost LFP batteries. South Korean manufacturers, by contrast, have focused on higher-performance NCM batteries. However, with the rise of affordable EVs amid a prolonged demand slowdown, global demand for LFP batteries has grown significantly.



LGES is also preparing to begin LFP battery production in Europe by the end of this year, signaling a broader strategic push into the segment.



Importantly, LGES is the first Korean battery maker to begin local production of LFP batteries in the United States. This move also aligns with protectionist trade measures and supply chain localization efforts under U.S. government policy, enhancing the company’s resilience in North America’s evolving EV market.

 

 

 

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